10 Top Tips to Find the Best Equity Release Deal
Equity release schemes have become increasingly popular in the last few years. They can provide the opportunity to unlock the equity in your property without needing to move home. Many people can feel a little overwhelmed by the choice of equity release products and services available. However, finding the best equity release deal need not be stressful and these ten top tips will ensure that you find the deal best suited to your specific circumstances.
1. Look for the lowest interest rate
The interest rates on the various equity release schemes can vary greatly. Therefore, it is a sensible idea to shop around for the lowest possible interest rate. The interest rate offered by the equity release providers can depend on your particular circumstance, so it is important to obtain an accurate quotation.
2. Find a flexible drawdown plan
Some equity release schemes offer the possibility to receive a smaller sum on the outset of the term with the possibility to draw down additional funds as you require them. This type of flexibility can provide additional assurance and be extremely beneficial since you will only pay interest on the funds taken which can reduce the overall costs considerably.
3. Find a plan offering maximum equity release lump sum
Alternatively, you should find a plan which offers the maximum potential equity release lump sum. A lump sum payment is one of the most basic forms of equity release product. The interest which is payable is rolled up for over the full term. This means that there are no payments and the interest compounds each year for the remainder of your life.
4. Consider provision for a guaranteed inheritance for your beneficiaries
Many people considering equity release worry about losing the possibility to provide an inheritance for their loved ones. However, there are a number of equity release products which provide this type of provision. Some lifetime mortgage products may include a guarantee for inheritance protection. This allows the provision for preserving an amount from the home’s total value for an inheritance. Alternatively, home reversion schemes allow you to sell all or part of your property. If you choose to sell a portion of the home, the remainder will be available as an inheritance.
5. Review lifetime mortgages and home reversion plans
While home reversion plans are less common than lifetime mortgages as a form of equity release, it is worth considering whether this is the better option for you.
6. Assess the set up fees
The set up fees for an equity release arrangement can vary greatly, so it is important to assess the fees thoroughly. Some companies offer free valuations or assistance with legal fees, which may prove to be more beneficial even if the interest rate is not necessarily the lowest.
7. Assess the completion time
There are a variety of companies offering equity release products but it can be important to assess how quickly the arrangements can be completed. The average completion time from application to the release of funds is approximately six weeks. However, there are companies which specialise in expediting the process to ensure you receive the funds faster.
8. Take the time to research your broker options
There are a number of facilities online which allow for people interested in equity release to research suitable brokers. Websites such as Compare Equity Release.com can provide a great resource to locate the best option for you.
9. Negotiate with your broker
Although many arrangement fees are set by the lender, there are certain fees including the broker fee which can be negotiated. These fees can mount up considerably, so any negotiation could represent a big saving.
10. Choose the right solicitor
Although you may have a local solicitor you have frequently used, they may not have experience in equity release conveyancing. This could impact the speed in which the arrangement is completed. It can be far better to shop around to find a cost effective and experienced solicitor to expedite the arrangements.
If you are considering equity release schemes, it is worth taking the time to assess the available options to ensure you find the deal best suited to you.