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Mark Gregory, Founder and CEO at Equity Release Supermarket
www.equityreleasesupermarket.com
Tel: 0800 678 5955
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Question
Can I take out equity release with a bad credit record?
I own my home outright and have done for about 10 years. Unfortunately, I had some money troubles a few years ago and I got behind on some credit card payments.
I am now repaying a little each month and have not missed a payment for a year, but I still have a large amount of debt which I am considering clearing with equity release. I am concerned that my bad credit rating will impact my application. Will I still be eligible?
Answer
Whenever advising on the best solution for debt repayment, we would consider all later life lending products – including lifetime mortgages, home reversion and retirement interest-only (RIO) mortgages.
Without having the benefit of your credit file, I will assume due to the adverse credit RIOs are ruled out. As you’ve mentioned equity release in your question, I will focus on how lifetime mortgages could assist.
Lenders don’t take into account your income when assessing a lifetime mortgage application as they don’t judge affordability, even if making repayments, and in most circumstances having a poor or adverse credit record isn’t an issue. Even if you have County Court Judgements (CCJs) there are lenders that will consider you, depending on the number and size of any CCJs.
It’s always important to speak to an independent equity release adviser in these circumstances. Lenders have different rules on adverse credit, so an adviser with access to the whole of the market would be able to shop around and find which lenders could be of assistance and ultimately find the best deal to suit you.
The best way to find out if you are eligible, based on your personal circumstances, is to speak with an impartial, expert adviser at Equity Release Supermarket.
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Question
Do I need to appoint a solicitor?
I am considering equity release as one option for boosting my pension pot in retirement and have heard the transaction is similar to that of a mortgage and I would need to hire a solicitor?
Is this correct and, if so, what will they be required to do? Should I appoint a conveyancer or are their specialists who help people with equity release?
Answer
Yes, you will need to use the services of a solicitor as part of the equity release application process. This is to ensure that your legal interests are looked after and it’s also one of the stipulations of the Equity Release Council (ERC) – the body that oversees the equity release industry – that you have at least one face-to-face meeting with an independent solicitor.
At Equity Release Supermarket we are long standing members of the ERC and so we’re here to help you with the legal aspects of equity release.
We have our own panel of solicitors who are equity release experts and all members of the ERSA (Equity Release Solicitors Alliance).
Using one of our solicitors also has added advantages, for example we have negotiated very competitive rates and our systems are integrated with the solicitors’ which enables us to quickly resolve any issues and speed up the whole process.
Additionally, our panel solicitors will not charge their fee should the application not continue to completion.
You are free to appoint your own solicitor (or conveyancer), but we recommend that you appoint a firm who are members of the ERSA. We’ve written an article which explains in detail the role of your solicitor in the equity release process.
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Question
Can I get equity release on a retirement property?
I have been looking for a provider who will allow me to release equity on my new-build apartment which is part of a retirement village… but this has been to no avail. I have been told a retirement interest-only (RIO) might be suitable but I would prefer equity release.
Is there a reason why a new build property in a retirement village is not permitted? And are there any lenders who might help?
Answer
The answer to your question depends upon the type of lease that accompanies your retirement apartment. If it is an apartment within a ‘block’ of other apartments and the property is freehold, then equity release lenders won’t consider it.
Other issues that can sometimes arise with retirement villages involve any onerous conditions within the lease and service charges – including age restrictions, sinking fund and sell-on clauses.
It is always best prior to any application that you provide a copy of the lease which we can run by the lenders and solicitors for approval.
Most apartments are sold leasehold in England and Wales and most equity release lenders are happy to lend on leasehold properties. Lenders will also check the length of the lease with usually a minimum of 75 years being required, however some are much higher than this. We have also written an article about leasehold properties and equity release which you may find useful.
It always pays to speak to an expert with properties that don’t fit the ‘norm’ and at Equity Release Supermarket we’ve successfully helped many customers who have leasehold properties. Why not speak to your local adviser by calling us on 0800 802 1051?
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Question
Obtaining advice – how to do go about this?
What’s the process, please, for getting advice about equity release? I understand I must seek advice but who should I approach and how will they proceed?
Will I need to contact a financial adviser and will I need to visit their office or can this be done over the phone? I live alone and don’t have many transport options available to me so I am little worried about travelling to a big town. Thank you for your help.
Answer
You’re absolutely right, you must seek financial advice as part of the equity release process as it is a legal requirement that the financial services watchdog – the Financial Conduct Authority (FCA).
I would recommend that you speak to an adviser who is an expert in equity release as you must have specialist qualifications to advise on such matters. You can find such an adviser at the Equity Release Council’s (ERC) website, in their directory of members. All the advisers at Equity Release Supermarket are members of the ERC.
I can’t speak for other adviser firms, but at Equity Release Supermarket, how you proceed is entirely up to you. Your local adviser would be happy to travel to you and meet you at your home and we would suggest a family member, or friend also attends the meeting.
Alternatively, we have a tele-advice team who can speak to you over the phone. Either option means you don’t have to travel, if that is a concern. Hence, we can liaise with you, whichever route is most comfortable and convenient for you.
The advice process can vary depending upon which advisory service you choose. Many of the largest brokers use call centres as the first point of contact and they will take your details and more information about you before allowing you to speak to an adviser.
At Equity Release Supermarket we don’t have call centres and the first person you’ll speak to is your local adviser, who can work at your pace and provide information in your preferred format – whether face-to-face, telephone, email or post.
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