What does a Typical Equity Release Broker Charge?

Many people considering an equity release scheme can be a little overwhelmed by the significant differences charged by different companies as their equity release advice fee. Many people wonder what are the typical fees, but this can be a difficult question to answer as the charges can vary greatly between companies.

Is Cheaper Better?
When it comes to your equity release advice fee, cheaper isn’t always better. The typical equity release advice fee is between £795 and £895. However, it is important to investigate the fee a little further and discover what it is you are paying for. Some companies charge a set fee while others may charge a percentage of the amount of equity released. However, you may find that some brokers will provide a free valuation or assistance with legal costs to make their advice deal more attractive.

You should also consider the limitations of your advisor. Some advisors are independent while others are affiliated with a specific company or product range. Independent advisors can provide access to a greater number of deals from a multitude of equity release providers. This could mean that while their fee is a little more, they can secure you a far more attractive rate or package.

Why Does the Charge for an Equity Release Advice Fee Vary?
Unlike a number of other charges or fees which are associated with your equity release scheme, the equity release advice fee is determined by the advisor. Some specialist companies have a set fee of £795, while others offer provision of the exact same lifetime mortgage scheme and charge a far larger fee of £1,495. This represents a very large difference which can have a significant effect on your budget. The reasons for this difference could be attributed to a number of factors including the company’s internal structure, company expenses, their profitability or even the standard of the advice provided.

Two of the biggest companies specialising in equity release advise charge approximately £895 for their equity release advice fee. However, they also charge a variable percentage based additional fee on the release amount. This would dramatically increase their fee. This would mean that a larger equity release loan would attract a higher charge even though the same paperwork and administration is required for any size loan.

Is a Set Fee Better?
This will obviously depend on the fee. Some of the most competitively priced equity release advisor services charge set fees. Whether this is the best option for your circumstances is obviously subjective. However, upon further research, you may find the advisor or broker is able to provide a competitively priced equity release advice fee and offer to negotiate reduced legal fees. For example, the director of Equity Release Supermarket, Mark Gregory strongly believes that the £795 fixed fee offers one of the most competitive deals in the equity release marketplace. They provide telephone and in person advice services and recommend solicitors from the Equity Release Solicitors Alliance, with a negotiated fixed fee for the conveyancing of the transaction. The company also has a policy that the fee is payable only on completion. This means that should the scheme be inappropriate or there are unforeseen circumstances you will avoid out of pocket expenses.

Why is the Advice Fee So High?
All equity release schemes are subject to the regulations and rules of the Equity Release Council. This trade body was established to promote the protection of consumers. Since equity release affects not only the applicant but their beneficiaries, too, there are several precautionary measures to ensure that it is the right option. These measures are not required for conventional mortgage products. These precautionary measures do require additional paperwork for compliance including documentation which details the limitations and implications of the equity release product. This additional paperwork requires additional administration and research. The equity release advice fee reflects the additional work which must be undertaken for these cases.

Do All Advisors Charge a Fee?
The cost of the fee can vary greatly and some advisors do offer free advice but there may be restrictions or limitations to their advice; including being linked to a specific company or range of products. This may not represent the best possible option for your particular circumstances. Although advisors who do not charge a fee must still comply with the Equity Release Council’s consumer protection measures, they may not be able to offer a full range of products and services.

When considering an equity release scheme, the selection of products and number of advisors can be more than a little bit daunting. However, it is important not to base your decision on choosing an advisor solely on the cost of their equity release advice fee. It is important to assess whether the advisor can provide the best possible scheme for your circumstances and provide a great deal. You may find that paying a little extra on the advisor fee can save you a great deal in the long term.