Can I Get Equity Release Advice from My Bank?
Many people considering equity release look to the high street and are disappointed that they cannot obtain equity release advice from banks. Currently the only form of equity release available from high street banks is to apply for a standard re-mortgage. Of course, this option requires monthly repayments to be made on a capital and interest basis. Additionally, there are restrictions for lending on this type of product depending on your age, employment status and disposable income.
Why Can’t I Get Equity Release Advice from Banks?
Equity release advisors need to have specific qualifications which allow them to advise on the various equity release products. While any independent financial advisor or mortgage consultant with the basic finance qualifications can sit these examinations, it is not a step many banks have considered.
There are a number of reasons why this might be the case. Many experts believe it is because of the bad press equity release received in the 1980’s and 90’s. This was a period when equity release was not a regulated industry and many people received poor advice which resulted in negative equity situations and increased debt. However, the industry is now highly regulated by the FCA and all schemes are carefully monitored to ensure that all customers have the data needed to make an informed choice.
There is also an assurance that no equity release product will allow a home owner to face a negative equity situation or leave a debt for their estate. Many experts believe that the majority of high street banks are concerned about their reputation as financial institutions. However, there are industry rumours that some high street banks may be taking more interest in the equity release industry, so it may be possible to receive equity release advice from banks in the near future.
Didn’t You Use to Be Able to Receive Equity Release Advice from Banks?
There have been instances in the last decade or so of banks which have experimented with lifetime mortgage schemes. The NatWest/Royal Bank of Scotland attempted offering lifetime mortgage products with some success. It became available in 2006 to their retired bank staff and long-time customers. However, the scheme was only available temporarily as by 2009 the bank closed the operation down due to a lack of funds.
The HSBC also offered equity release products in 2006 after they tied into a tender with In Retirement Services. This was a now dissolved equity release provider which offered their products via HSBC. Many experts were a little confused by the decision of HSBC to offer non independent products to their customers. The relationship did not last long and In Retirement Services went into administration in 2009.
If you are interested in an equity release scheme, unfortunately it is not currently possible to receive equity release advice from banks. You will require a qualified equity release advisor in order to proceed with an application. There are a number of qualified professional advisors available and the Equity Release Council has a full list on their main website of their members both locally and nationally.