Equity release whole of market advisers is often referred to as independent brokers. As the name suggests, they have access to the full lending market, which takes in more than 300 individual lenders.
In theory, this enlarged access allows them to negotiate the best deal possible for your equity release requirements.
Independent mortgage brokers are more popular today than they ever have been with many working on a mixture of income from client commission and lender commission.
The ability to nurture long-term trading arrangements with lenders ensures that many of the deals presented to clients are not in the public domain.
Keep reading to get the full benefits of using a broker who can provide a ‘whole of market’ quote.
Do I Need to Look at a Whole of Market Equity Release Quote?
The fear that you will be bombarded with dozens and dozens of potential offers is a misconception. The idea is simple; you sit down with an independent mortgage broker, tell them what you require, your financial situation and they will find the best terms for your scenario.
There is obviously a lot more work to do behind-the-scenes, but this will give you a feel for what goes on.
What Type of Equity Release Lenders Will I Have Access To?
In theory, you will have access, via your independent mortgage broker, to traditional banks, private banks and niche lenders. Private banks and niche lenders tend to accommodate equity release scenarios which are slightly different from the norm.
Traditional banks have more of an appetite for “vanilla” equity release requirements which are relatively straightforward.
How Will I Know I Have the Best Deal Available?
The vast majority of equity release lenders will have an online presence and make pubic their various offers. Therefore, there is nothing stopping you from checking the Internet to see which lenders are offering the best rates.
The key to securing the best terms for your situation can be very different. This is where your mortgage broker comes into play; they have the experience, access to the whole market and very close relationships with numerous lenders.
Before you choose an independent broker, you can also research feedback and press coverage on the company.
Is It Time to Release Equity From My Property?
While an independent broker will give you advice regarding your situation, timing and prospects for the future, nobody has a crystal ball. The value of your property, the value of your equity and the interest rate on equity release mortgages today is the only certainty.
It may go up or down over the next six months; it may remain fairly steady.
If you have decided to release equity from your property, we assume for a particular reason, then holding off for slightly improved terms would seem a little risky?
What Are My Options for Equity Release?
There are four main options when it comes to equity release, which are remortgage, equity mortgage, lifetime mortgage and a home reversion scheme. Remortgages and equity mortgages tend to be more available to those under 50 years of age.
Lifetime mortgages and home reversion schemes tend to be available to those 50 years of age and over.
Why Are Remortgages and Equity Mortgages Not Available for Those Aged 50 and Above?
Many believe that the mortgage lending market is to a certain extent, discriminatory towards those aged 50 and above. Remortgages and equity mortgages tend not to be available to this age range because of the perceived lifetime expectancy.
There’s also the expectation (rightly or wrongly) of reduced income in later years as people tend to reduce their working hours or indeed retire. In reality, we are now living longer, working longer and in theory, more healthy.
Therefore, we may soon see a change in the lending markets to represent changes in the UK demographic. Those aged 50 and above will represent a growing percentage of the overall UK population – surely it won’t be long before more lenders tap into this growing market?
Why Are Lifetime Mortgages Targeted at Those Aged 50 and Above?
A lifetime mortgage is a way in which to release equity in your property, but there are no regular repayments. Instead, interest is rolled up month by month and repaid together with the original capital when the borrower either dies or moves into full-time care.
At this point, the property is sold, lifetime mortgage paid off, and the balance returned to the homeowner/executors. Uncertainty regarding life expectancy has seen many lenders deem this type of mortgage more applicable to older homeowners.
Why Are Home Reversions Targeted at Those Aged 50 and Above?
Home reversion plans are basically a means of selling off a percentage of your property to a third party investor. The investor will only see their investment crystallised when the homeowner either dies or moves into full-time care, and the property is sold.
In the meantime, the homeowner will enjoy rent-free accommodation, although both parties would enjoy any future capital appreciation on the property.
When looking at a home reversion plan, you will need to take account of the discounted market value on which home reversion plans are based.
How Much Equity Can I Release?
On a mortgage-free property, you could potentially release up to 80% of equity with a traditional remortgage. Equity mortgages are little different because they sit on top of the original mortgage, therefore, requiring two separate payments.
With these two mortgages, you would also need to pass a mortgage affordability test. When it comes to lifetime mortgages, it is unlikely you will be able to exceed 60% equity release on a mortgage-free property.
Home reversion plans are a little different but would likely be around the lifetime mortgage level.
Common Reasons for Releasing Equity in Your Property
There are many reasons why people release equity in their property, including home improvements, debt management, holidays of a lifetime, acquisition of vehicles, investment and business opportunities to mention just a few.
In theory, there are no restrictions on how you spend your equity release – assuming that you pass the relevant affordability test with remortgages and equity mortgages.
Using an independent mortgage broker, referred to as a whole of market adviser, gives you access to the wider lending market. This gives mortgage brokers the opportunity to create a degree of competition amongst lenders to get the best terms for you.
If you are looking for specialist equity release advice, then you should look for a specialist mortgage broker.
How Can Equity Tree Help?
Here at Equity Tree, we have partnered with some of the UK’s leading Equity Release broker companies.
They have already helped thousands of people release equity already, and they can do the same for you.
Choosing an independent adviser means they won’t recommend a scheme unless they are sure it is in your best interests. Their advice is also regulated by the FCA, which gives you an additional layer of protection.
If you would like to speak to one of these equity release companies, click on the below and answer the questions.