A recent mystery shopping exercise by Which?, looking into the practices of 22 equity release advisers, found that 20 per cent failed the tests, in relation to advice given to customers.
Equity release is often considered by older home owners who want to enjoy a more comfortable retirement by releasing equity from their home. It is an option increasingly favoured by those aged over 55 (with property worth at least £50,000). Equity release may allow people to make home improvements, travel, help their children financially and improve standards of living generally.
There are two schemes; home reversion and lifetime mortgages. Both should be discussed together with interest rates and how the debt will grow. House prices and the set up costs for the schemes should also be discussed.
The investigation by Which? found that 12 advisors dealt with these issues, nine failed to discuss the basic product features, three did not discuss interest rates and how these costs would increase over time and six neglected to advise that house prices could go down.
Worryingly, the Which? survey found that only four of those advisors who were mystery shopped gave near perfect responses, only missing a few key points.
This is a big financial decision so it’s important to have experts on hand when releasing equity from your home. Those entering into equity release need to be given clear direction over the issues. We can offer fixed prices for equity release clients, so call us for help with this specialist area.
ENDS
Notes to editors
Stephensons is a North West regional law firm with a national reputation and reach.
Media information: Lianne Tracey
Stephensons Solicitors LLP
T: 01616 966 229
E: lianne.tracey@stephensons.co.uk