Equity release should be carefully considered, claims expert

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Equity release should be carefully considered, claims expert

Fri 26th Aug 2011

Homeowners should carefully consider their personal circumstances before going through with any equity release procedure, a specialist at Wayne Austin independent financial adviser (IFAs) has cautioned.

With a recent study from LV= claiming that close to 100 per cent of IFAs believe equity release will increase over the next few years to replace pensions as retirement income, Paul Rumbold - an IFA at Wayne Austin - said the products remain a "complex area".

"A careful analysis of [an individual's] situation needs to be undertaken to determine which is the best type of equity release for the circumstances," said Mr Rumbold.

He added that there are two types of equity release - a lifetime mortgage where money is borrowed from a lender but repaid when the house is sold on, or a home reversionary plan where the house is sold to a third party with the understanding that the seller still occupies it until vacating.

On August 22nd, LV= announced changes to its equity release terms, claiming simplicity and flexibility would be enhanced for customers under its new policy.

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