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5 Essentials when comparing Equity Release Schemes

Compare Equity Release

Last updated on 27 June 2023

If you are thinking about setting some time aside to compare equity release schemes, you have probably been considering its virtues for some time. However, you may now feel completely daunted by what you perceive to be a total financial minefield. If you take just one thing away from reading this article, let it be the fact that the equity release UK market really needn’t be that complicated and there are always financial advisers on hand to guide you through any aspects you do not understand when looking to compare deals.

To start the ball rolling, in order for you to compare rates in the equity release market, there is a list of five essential features you should bear in mind when looking for any lifetime mortgage product:

1. SHIP (Safe Home Income Plans)

We will start with the organisation known as SHIP, as this is the regulatory body that aims to ensure safe and secure practice within the equity release UK market. If you have a particular lender in mind for a lifetime mortgage product, it is imperative that you check to make sure that they are affiliated with this organisation. If no such allegiance can be found, do not touch the company as you will have no protection from its features.

2. Tools to Help You Compare Equity Release Plans

Just as you would with other financial products such as travel deals and insurance, there are now tools on the internet that will allow you to compare equity release schemes. All of these companies state that they offer a free equity release comparison calculator – but as if they could charge for such a facility in the first place. Nevertheless, many of these equity release calculators are very helpful to give you an idea of how much equity you are likely to be able to release from your property.

There are even some other equity release comparison tools that would allow people who already have a lifetime mortgage to compare deals in the market to find out if they might be better off switching to a new product. Given today’s economy, this is actually becoming more and more popular and could very well help you to find a better deal.

3. No Negative Equity Guarantee

This really is an important criterion to bear in mind when you look to compare equity release deals. Basically, this means that the company with whom you decide to take out your equity release plan will guarantee that there will never be any nasty surprises when the plan is finally paid back. So, when the people on the equity release plan do pass away or move into permanent care, this is when the company will retrieve their money, but crucially, they will not place a demand on the estate or relatives for payments that go beyond the final sale price of the house. Therefore, the beneficiaries can never end up owing more than the value of the property.

4. Still Possible to Guarantee an Inheritance to Relatives

This is one of the most important considerations when it comes to people looking to compare equity release schemes. Indeed, many people will be put off straight away through the fact that they believe that their relatives would have to forego their inheritance if an equity release plan is taken out. Whilst there will always be an impact on the amount of money that can be left to your relatives, it is entirely possible to find an equity release plan that is able to literally guarantee a certain amount of money that is to be left to your loved ones, when you have gone.

5. Free Professional Financial Advice

One of the main features you will find on all of the websites that allow you to compare equity release plans is very quick and easy access to professional financial advisers. They will help you get a better understand the terminology of the equity release UK market and all that is involved. Do not allow yourself to struggle with this industry, if there are any aspects that are not as clear as they could be, utilise their professional services and get clarification on everything before you even contemplate taking out any equity release plan.

Despite the fact this article only covers 5 points that are aimed at helping you when you compare equity release plans, hopefully over time, you should come to realise that these points are essential to set you on your way. They are definitely the most important to ensure the equity release lifetime mortgage product you end up with is protected under SHIP and includes the guarantees that are offered through the very best and most reputable companies.