Which is the best equity release company?
A lifetime mortgage remains to be a much more popular form of equity release, as compared to its alternative: the home reversion plan.
Depending on your circumstances and needs, you find the equity release
plans on the market have varying benefits that range from the flexibility to
cheaper plans.
Here we’ll underline the best equity release provides for lifetime mortgages that are under regulation by the Financial Conduct Authority.
Top Five Equity Release Providers
More 2 Life: Best for flexibility
It has a capital choice range of products which have early repayment
charges of 5% only in the first five years, and it falls to 3% from year six
to nine, and zero after ten years. You also get downsizing protection and
low fees for adding someone to the loan or removing them from it.
Note that products that come with greater flexibility also cost more. The decision to get an equity release is a big one; thus, you must talk through your needs with a financial adviser.
LV: Best for low early repayment charges
LV has fixed early repayment fees across all products it offers. It has
fees of 5% in your first five years, 3% from year six to nine, and nothing
after ten years. You get a relatively limited range of products, which
includes a lump sum loan and flexible products that allow you to lock in
withdrawals at fixed rates.
Just: Best if you want simplicity
Only have five equity release products, and they maintain a relatively
simple structure for fees. It doesn’t have a lot of additional charges,
unlike other providers, for things like adding people to the loan, and you
also get free valuation with low fees.
However, it’s among the minority of companies that still link early
repayment fees with prices on government bonds, which entails you can pay up
to 20% if you need to pay back your loan early.
Legal & General: Best for large loans
Legal and General offer massive loans of up to £2m, making them an
excellent provider if you own precious property. However, they also levy
government bond-based early repayment fees, which means potentially
incurring high costs if you need to repay the loan earlier.
Aviva: Best for older borrowers
Most equity release plans are not available for people that are over 90.
However, Aviva does consider applications as long as you are over 55. Be
cautious of Aviva’s early repayment charges as they can be as high as
25%.
If you need a home reversion plan, the best lenders are Bridgewater and
Crown Equity Release.
Why Go For Equity Release Scheme?
Equity release is good but not for everyone. You can cheaply release the value in your property by selling it and
downsizing to a smaller property or a cheaper area.
Even so, most people understandably don’t want to leave their family
houses, and that’s when equity release becomes a suitable means to raise income.
It would be best if you understood the costs and impacts that it will bear on the amount you will be able to leave
to pass on to your family as an inheritance. The decision to draw an equity
release is best with your beneficiaries or family.
If you get an equity release, it’s worth considering whether you can manage
to make monthly repayments to the loan. When you pay back the interest
monthly, you’ll have much more left to pass on.
Use an equity release calculator to get a general idea of how much cash you can get out of the equity
accumulated in your home, and the costs likely to emerge.
Choosing The Best Equity Release Broker
Be sure to choose a lender that is a registered member of the Equity Release Council. These firms will all offer “no negative equity” guarantees and the amount
that you owe the lender will not become more significant than your
property’s value.
For help on locating the best equity release plan for you, seek professional financial advice. Although some companies
will only advise you on a few products, and so there is no guarantee you’re
getting the best potential plan.
For instance, Legal and General are one of the biggest equity release companies, and they have their advisers. The benefit of this is that you won’t pay extra for the advice you will get from them, but the downside is that they will only recommend their company’s products. Therefore you may miss out on better products from another provider.
An independent financial adviser will give you a more expansive view of the
products available on the market. It’s vital to find a good independent adviser who specialises in equity
release.
The largest independent specialists are Age Partnership and Key Group.
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