Who Are the Equity Release Council?
Listen up! You’re about to discover why equity release is truly safe.
With a troubled history fraught with scandal and debt, equity release hasn’t always been the best idea for retirees.
The question is, have things changed in Oct 2021?
We’re here to help you discover:
- The measures taken to protect the equity release market.
- Who is the Equity Release Council and how it works.
- Why it’s vital to select a regulated equity release plan provider in Oct 2021.
- The rules set out by the Equity Release Council.
We’ve spent hours studying over 28 regulated plan providers, summarised the crucial role of the Equity Release Council, and put together this comprehensive guide.
Itching to fully understand the role of the Equity Release Council? Find out NOW!
What Is Equity Release?
Before you continue reading, we’ve summed up what you need to know about equity release in this short video. Check it out!
What Is the Role of the Equity Release Council?
Great news, things are different to years gone by! With the formation of the Equity Release Council in 1991, the market became a whole new world.
Read more on this: How Ethics Changed the Equity Release Market
The role of the Equity Release Council is to regulate equity release firms and protect the interest of the homeowner. 4 of its responsibilities include:
- Offering you all the information you might require on equity release and its products.
- Protecting any consumers using equity release, and those who are considering releasing equity from their home.
- Raising awareness on how equity release might be an ideal option after retirement.
- Representing more than 180 member firms and more than 500 people in the equity release industry, from experienced financial advisers and lenders to representatives and surveyors.
Something to consider: Common Pitfalls With an Equity Release Plan
The Council Regulates Legitimate Equity Release Providers
The Equity Release Council is there to help you recognise the equity release companies to avoid, such as:
- Plan providers who don’t have a ‘no negative equity guarantee.’
- Lenders who aren’t members of the ERC.
- Providers who charge high interest rates.
- Lenders who charge very high repayments and who charge them early.
- Equity release firms that give you large loan amounts before they even assess your circumstances.
Find out more: Why You Should Be at Ease With Equity Release
What’s Their Code of Conduct?
ERC members also have to abide by a strict code of conduct:
- The borrower has a right to remain in the property for life until they pass away.
- The borrower will be offered clear, concise paperwork that includes all setup costs and information on how changes in house values might affect the plan.
- The consumer’s preferred representative steers any legal work. The borrower and their solicitor will sign a certificate stating that the plan has been clarified and all risks are understood.
- The client can move their plan to another property without penalties.
- The Equity Release Certificate defines the cost to the client’s asset and estate.
- Equity release plans carry a “NO NEGATIVE EQUITY GUARANTEE.”
Are you wondering what this means? Continue reading to find out!
Read more about: The Process Involved With Getting an Equity Release Loan
What’s a “No Negative Equity Guarantee?”
This guarantee protects you so that your estate doesn’t have to pay more than what is owed to your equity release provider. When your lifetime mortgage plan comes to an end, the lender will sell your house and settle the loan amount plus any interest. Any additional funds will be a part of your final estate.
If the estate market value decreases and the money can’t repay your mortgage, the lender won’t request more cash from your estate or heirs. Since you’ll be protected by the ‘no negative equity guarantee’, the lender won’t be legally permitted to do so. Always consider the equity release companies that will offer you this protection.
Got Questions? Check These Out First
Who Are the Equity Release Council?
The Equity Release Council is a non-profit organisation that regulates the equity release industry.
What Are the Product Standards Set by the Equity Release Council?
The product standards set out by the equity release council include:
- When it comes to lifetime mortgages, the interest rates should be fixed, or if they’re variable, there should be a cap (upper limit) set for the life of the mortgage.
- You have the right to continue residing in your home until the loan term ends, as long as the estate is your primary residence and you stick to the terms and conditions stipulated.
- You have the right to move to another house as long as the new estate is acceptable to your plan provider.
- All equity release providers should offer you the ‘no negative guarantee’ that protects you from paying more than the value of your home.
What Are the Equity Release Council’s Roles and Responsibilities?
The equity release council’s roles and responsibilities include:
- Safeguarding equity release users.
- Raising awareness on how equity release might be an excellent choice after you retire.
- Representing more than 200 member companies and over 1,000 persons subscribing to the equity release products, financial advisers, lenders, and even surveyors and their representatives.
How Does the Equity Release Council Protect Me?
The equity release council protects you by ensuring that lenders offer fair plans that benefit both parties.
Spending time working out your finances and retirement plan can be quite draining. Fortunately, the Equity Release Council is there to protect you, should you choose to release equity from your home.
The council will help prevent you and your heirs from spending too much money on interest and losing unnecessary cash.
It is vital in Oct 2021 to use a regulated and top equity release provider, and also be aware of the equity release providers to avoid, in order to release equity in a safe, and life-changing way.
You can get in touch with your financial adviser today to start your equity release journey.