Lawyer: Financial advice needed before equity release purchase
12 October 2012
Older homeowners who are looking into ways to improve their financial situation have been given tips on how to go about purchasing equity release plans.
According to lawyer Fiona McNulty, who is a partner in the residential real estate team at Thring LLP, it is vital to see a financial adviser before coming to a decision.
Responding to a reader's query for Homes & Property, she explained equity release involves either a lifetime mortgage or a home reversion plan.
The specialist highlighted the fact that in the case of an older couple wanting to go ahead with unlocking a chunk of money from the value of their home, it "will be a shared plan in the names of both your parents that will provide a tax-free cash payment, which may affect any entitlement your parents have to state benefits".
One issue that often arises among those who are looking into using equity release products in order to improve their financial situation later in life is that it could affect the inheritance for their children, with frank discussions needing to be held before a decision can be made.
Ms McNulty stated those who are considering equity release need to find an independent financial adviser who is a member of the industry regulator the Equity Release Council, as this means they will be getting the best possible advice on what to do for their financial future.
She explained the specialist "will consider their personal and financial circumstances and advise whether equity release is right for them and which is the correct product for them".
Although equity release is not always the right choice, in many cases it can enable older homeowners to free up the money they need to enjoy a comfortable retirement.
Figures released by unbiased.co.uk recently showed retirement advice is the top reason people are searching for financial advisers at the present time.
Homeowners wishing to find out more about their options can get in touch with the experts at Key Retirement Solutions for more details on equity release plans.