Consumers Need To Take Advice On Equity Release Loans
It has been a difficult twelve months for the equity release loan and lifetime mortgage market, with house prices falling, reducing the level of equity held in a property and several large lenders withdrawing from the market altogether.
Despite this, an equity release loan is still a popular option for many individuals in retirement, either to provide them with additional income, or to repay outstanding debts on an existing home owner loan, personal loan, or credit cards, or just to give them peace of mind and the financial security of having some cash behind them.
According to the latest research from Hodge Equity Release, one of the founder companies of SHIP (Safe Home Income Plans), equity release loans are still popular among many retired people and their perception of the products is steadily improving, following the bad name the sector got for itself in the eighties and early nineties, with a large proportion taking out the loans for the peace of mind they offer.
Hodge also say that it is vital for anyone looking at an equity release loan to seek professional advice from a fully qualified financial adviser, who can assess a potential borrower’s financial situation and recommend the most suitable product from the whole of the equity release loan market.
In 40 per cent of all Hodge’s cases last year, clients took advice before making a decision and all of these claimed that the advice received was worth the cost of any fees payable.
Jon King of Hodge Lifetime said “There is no denying that the equity release market has taken its fair share of blows during 2009 and the withdrawal of large product providers has altered choice for customers. However, the importance of advice will never be removed and must remain the keystone for the industry going forward.”
