Is equity release a safe option?

Any financial decision that involves the home you live in is not an easy one to take. Whether entering into a mortgage agreement for the first time or releasing equity from a property to fund retirement, the impact of these decisions can last decades or even for a lifetime. It is important to ensure that you get any of your questions and worries answered before making a decision.

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As the population ages, more people than ever are looking for ways to free up cash later in life. Interest in using property value is on the increase. Yet for some, even considering equity release as a financial solution can make them feel uncomfortable. This is where a professsional Gloucestershire Equity Release company such as can help talk you through the process and answer any questions that you may have as well as take you from start to finish.

The stigma

Many people still associate equity release with costly and inflexible deals that lock a client in for life, with little or no option to transfer or move home, high penalties on repayment, and compound interest that leaves nothing for inheritance. Coupled with the sense of failure some feel about the need to take out another mortgage in retirement, it’s unsurprising that it isn’t the most popular solution.

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Innovative, flexible, regulated

The first assurance any client who is considering releasing cash from the value of their property is that equity release is regulated by the Financial Conduct Authority. The growing potential market has encouraged more competition among lenders, offering greater choice and flexible deals for clients to consider. However, while equity release is much safer than it used to be, clients still need expert financial advice to help decide whether it’s the most appropriate option for them.

Software for financial advisers

The operate a strict code of conduct which its members must follow to ensure protection for their customers. This includes protection against negative equity and security of tenure. The insistence on professional financial and legal advice for clients before entering into an agreement means that advisers need the best tools available to provide a compliant service.

A robust financial software package can assist advisers in assessing whether equity release is the appropriate choice for their clients, and provide access to research on today’s more flexible options. In doing so, it has the potential to help shake off the stigma of the past.

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