Seven ESSENTIAL questions to ask equity release advisers

Be prepared with these ‘must ask’ questions about equity release

Written in line with our editorial policy.

You’ll need professional advice if you want to take out an equity release plan. Asking the right questions can make your initial appointments go smoothly.

The best equity release advisers will of course have experience of providing all the information you need in a professional and competent way. But it certainly can’t do any harm to be prepared with questions to ask them.

With that in mind, we’ve identified these seven ‘must ask’ questions to raise with any adviser you talk to:

1. “Am I eligible for equity release?”
2. “Are any alternatives more suitable than equity release?”
3. “Are you a member of the Equity Release Council?”
4. “Is the plan provider a member of the Equity Release Council?”
5. “How much will my plan cost?”
6. “What are the pros and cons of lump sum and drawdown plans?”
7. “What are the future implications of taking out equity release?”

Why not put your questions about equity release to an adviser today? For help and advice from our selected advisers, call us on 0808 178 3055, or request a call back and we’ll arrange an initial telephone appointment for you. Alternatively, check your eligibility and get an initial indication of how much tax-free cash you could unlock.

“Am I eligible for equity release?”

It makes sense that the first of your equity release questions should be to check your eligibility. Your equity release adviser will check some core criteria to assess whether you are eligible. The typical eligibility criteria include:

• A minimum age of 55. This age also applies to the youngest applicant for a joint plan.
• You own a UK property with a value of at least £70,000, although the minimum will be higher than this for some types of property. You can still apply if you still have an outstanding mortgage but you will need to clear this with some of the cash you release.
• A property of an acceptable type. Some ‘non-standard’ properties and those in certain locations are not acceptable.

See our guide to equity release eligibility for more details, but remember that your adviser will be happy to talk through your eligibility with you.

“Are any alternatives more suitable than equity release?”

Every equity release adviser should help you to consider other options for raising the money you need. Equity release is one of the more expensive forms of borrowing in the long term, so you should consider alternatives to equity release such as downsizing, remortgaging, getting help from family, accessing grants or benefits, or even selling assets that you would be able to part with.

“Are you a member of the Equity Release Council?”

The Equity Release Council is the UK’s industry body that sets standards to protect consumers. We recommended that you only deal with advisers who are members of the Equity Release Council, so if you aren’t sure if the adviser you are talking to is a member, please ask them.

By being a member, your adviser will have signed up to the Equity Release Council’s rules and standards. This means they are committed to providing ‘fair, simple and complete’ information about your equity release plan.

“Is the plan provider a member of the Equity Release Council?”

As well as checking that the adviser is a member of the Equity Release Council, you should check that the provider of any plan recommended to you is also a member. 

Providers who are members will agree to the Equity Release Council’s insistence that their plans give you certain rights and guarantees such as a ‘no negative equity’ guarantee, and the right to move home. These guarantees, as well as regulation by the Financial Conduct  Authority, are among the reasons why the so-called ‘equity release horror stories’ of the 1980s are now firmly in the past.

“How much will my plan cost?”

Part of an adviser’s responsibilities as a member of the Equity Release Council is to provide you with information about all the costs involved in any plan they recommend. The costs will include the adviser’s fee, solicitor/legal fees, and fees charged by the provider (both at setup and potentially in the future).

It’s important that you understand these costs, and that you don’t just focus on the amount you can release, or the interest rate offered by the plan provider.

“What are the pros and cons of lump sum and drawdown plans?”

The most common form of equity release is a lifetime mortgage, and these are available in two types in terms of when you access your cash:

• With a lump sum lifetime mortgage, you take all of the cash you wish to release in a single payment.
• With a drawdown lifetime mortgage, you take an initial cash sum and additional funds as and when you need them. 

A drawdown plan has the main benefit of reducing the amount of interest payable on the loan through the sale of your home when you pass away or move into long-term care. Your adviser will be able to explain further, in the context of your reasons for considering equity release, so you can decide which type of plan is best for you.

“What are the future implications of taking out equity release?”

As with all the areas mentioned above, the best equity release advisers will work hard to consider any future implications of equity release, based on your circumstances. These might include any impact on your entitlement to State benefits, the effect on any inheritance you wish to leave, what might happen if you wish to access more cash or move house in the future, and so on.

Taking out an equity release plan is a long-term commitment that affects you and, potentially, any family members who you wish to leave something to when you pass away. So please take time to think carefully about possible future scenarios and ask as many equity release questions as you wish.

What are YOUR equity release questions?

Here at Equity Release Wise, we want to do as much as we can to answer your equity release questions. To start with here are some articles our team have written to help you:

• Equity release: frequently asked questions. We’ve answered ten of the most commonly asked questions about equity release. Frequently asked questions we’ve included range from ‘How does it work?’ to ‘How safe is equity release?’
• Pros and cons of equity release. Read our guide to the main advantages and disadvantages of equity release.
• Guide to UK equity release providers. We’ve compared some of the UK’s leading providers.

But the best way to really understand equity release and its suitability for you is to talk to one of our selected advisers. They will be happy to answer your questions about equity release and will:

• Verify your eligibility.
• Check if it’s the best option for you.
• Search for competitive quotations from leading providers.
• Help you decide which plan best suits you.
• Guide you through the application process through to completion, if you choose to go ahead.

To talk to an adviser, please call 0808 178 3055, or request a call back for a time that suits you.

About Richard Groom. A writer with 20+ years’ experience across several sectors including financial services, Richard has a passion for writing clear and simple content on even the most complex of subjects. In his spare time, Richard loves exploring the hills and mountains of the UK on long walks with his faithful cocker spaniel. Follow Richard on LinkedIn