Fordyce & Playle provide completely independent whole of market equity release advice. We are not tied to any particular lender or panel and our objective is always to find the best deal to suit our client’s circumstances and life goals.
Equity Release has a bad reputation due to the miss selling that occurred in the late 1980’s and early 1990’s. Since then the industry has introduced a magnitude of regulation which protects the consumer. The Equity Release Council (formerly known as Safe Home Income Plans, SHIP) is an independent body dedicated to the protection of equity release planholders and the promotion of safe equity release plans who we are in full support of.
At Fordyce & Playle we take extra special care when discussing equity release products with our clients and often involve other family members in the process to ensure everyone is comfortable with the products and options.
Equity release has been designed to help people who are over the age of 55 and consider themselves as “Asset Rich but Cash Poor” i.e. they have a lot of equity in their home which they wish to access as they do not have enough cash in the bank for their goals.
Inheritance can be important to people and is always to be carefully considered. We can discuss the implications on equity release and inheritance with you in detail and in some scenarios put in place inheritance protections.
A lifetime mortgage is the most popular type of equity release as the planholder still owns the property and can remain living there but does not have to make any monthly payments on the borrowing. The provider will recoup their investment upon the planholder passing away (or going into long-term care) as the property is then sold.
The minimum age for a lifetime mortgage is 55 and the older you are the more generous the lender will be in regards to loan amount. Also if you have any illnesses they can be taken into consideration to increase the borrowing as well.
The interest charged on a lifetime mortgage does not need to be paid but instead it is rolled up (meaning it is added to the debt), the roll up effect of interest can mean this type of borrowing can ultimately be expensive. There are protections in place such as the “No Negative Equity” guarantee that providers must abide by meaning the amount owed will never be more than what the property is worth so there is no further liability on the inheritors of your estate.
Home Reversion Plans:
A Home Reversion Plan is similar to a lifetime mortgage in that the provider will not charge you to live in your home and will lend you money based on your age and health, but the fundamental difference is you will give away ownership to all or part of the property.
No interest is paid on the money borrowed as the provider is betting on the property increasing in value so they can recoup their investment upon the planholder passing away (or going into long term care) at which point the property is sold.
On a part reversion scheme, some equity in the property will be retained meaning that the beneficiaries of the planholders estate will inherit the pre-agreed percentage of ownership.