How Much Does Equity Release Advice Cost?
Equity release is a common form of finance which allows home owners to release the equity held in their homes as a lump sum or regular income without the inconvenience and cost of moving home. It is more common in home owners who have paid off most or all of their existing mortgage. This type of finance is similar to a conventional mortgage in a number of ways and will incur similar charges such as valuation fees, solicitor costs and arrangement fees. However, many people considering equity release are unsure about the cost of equity release advice for this type of financial product.
Cost of Equity Release Advice
The cost of equity release advice can vary significantly depending on the brokerage company and particulars of your equity release product. The advisor fee can be either a fixed charge or set as a percentage of the amount of the release. This is usually subjected to a minimum figure but average prices tend to be approximately £795 to £895. This final fee can make a significant difference to the overall cost of equity release, so it is important to research your options fully to ensure you obtain the best possible deal.
Why is the Cost of Equity Release Advice High?
Due to the nature of equity release, the Equity Release Council was established as a trade body to ensure that consumers are protected. The body have established some precautionary measures which are not compulsory on conventional mortgage products. These measures require compliance and additional paperwork including declarations that the client is fully aware of any implications and limitations of the actions involved in the withdrawal of equity from their property. This requires additional research, paperwork and administration for the advisor which is reflected in the cost of equity release advice.
Do All Advisors Charge a Fee?
The amount of fee charged can vary greatly according to the advisor. Some advisors do offer free advice but there may be restrictions or limitations to their advice, including being linked to a specific company or range of products. This may not represent the best possible option for your particular circumstances. Although advisors who do not charge a fee must still comply with the Equity Release Council’s consumer protection measures, they may not be able to offer a full range of products and services.
Finding the Best Fee Deals
This can depend on your specific circumstances. Some brokers offer reduced fees, subsidy of legal fees or other incentives. However, it is important to assess the implication and any restrictions of these offers. You may find a greater choice of options with a broker who charges a fee but is able to secure a more advantageous rate or terms. Your broker should detail all applicable fees including their advisor fee, in order for you to be fully aware of the total fees and charges. In some cases, these charges can be significant, so it is important to assess all the charges before committing to finalise an application.
As with any financial product it is important to understand the terms, conditions and any restrictions. These conditions are usually set by the specific lender, but the advisor fee is set by the individual advisor or brokerage company. Before committing to a broker or service, be sure that you have taken the time to research your options and are completely satisfied that you understand any restrictions or implications. The cost of equity release advice can be either a set fee or a percentage of the equity released, so ensure that you are fully aware and comfortable with the exact amount before proceeding.