Can I Go Direct to the Lender and Apply for Equity Release?
For many people considering equity release schemes, there is a temptation to attempt to release equity by going direct to the providers. You may have carefully considered your options, be convinced that you have found the right deal and want to save on costly advisor fees. However, it is not possible to approach providers direct and there are a number of reasons why.
The Financial Conduct Authority class any equity release products or schemes as a “high risk” financial arrangement. This risk level means that there are rules in place so that any applicant will receive proper advice before they proceed. The main reason why the level of risk is categorised in this way, is because of the potential long term implications which are involved in taking out this kind of financial arrangement. Although equity release may be the best solution for you, making the wrong choice in an equity release scheme could cost you a great deal in the long term. The provision for receiving adequate advice ensures that people are fully aware of their options and any restrictions or limitations of their chosen scheme; this would not be possible if people were allowed to release equity by going directly to providers.
Access to a Greater Variety of Schemes
Although you may have already spent time researching a number of equity release schemes, the best way to get the most suited scheme to your requirements is in finding an experienced equity release advisor. Qualified, professional advisors have access to a large number of schemes and products. You may find an independent advisor beneficial since they are not tied to one specific company or product range. This means they can offer advice across the whole equity release market. Professional advisors may have access to a number of products and special offers which have not been widely advertised but could represent the best possible option for you.
Many people research equity release schemes but they are unaware of the differences in the various products and plans. For example, you may find an equity release advisor who suggests that a home reversion plan may be better suited to your circumstances. This type of arrangement allows you to sell all or part of your property to a company which provides a lease for you to remain in the home for the rest of your life. Home reversion schemes are not as common as other equity release products, therefore they are not as widely advertised, but in some cases they can represent the best possible option.
Is There No Way to Release Equity by Going Direct?
You must have an equity release advisor or broker in order to secure a scheme. Some people mistakenly believe that they can release equity by going direct. However, the companies are forbidden by FCA rules to transact directly and will refer them to finding an appropriate advisor.
How is it Checked?
There is a declaration on each application which is to be completed by the advisor. The advisor must be fully authorised to provide advice and hold the relevant qualifications. All lenders have a full record of who has the correct certification to broker equity release schemes and it is checked upon receipt of any application. If an application is received without advisor details, it will be returned or the client referred to where they can find an equity release advisor, for example the Equity Release Council website.
For anyone interested in releasing equity by going direct you should be aware that proper advice is necessary and required for your own protection. You will most likely realise that when you find an equity release advisor who is independent and qualified to provide advice on all aspects of equity release, you will secure a much better deal than you originally thought. Specialist advisors deal with equity release arrangements every day and can ensure that you proceed with the deal which is best suited to your needs. They can speed up the process and will provide advice and guidance to ensure that you gain the resolution you require.