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The Importance of Annual Equity Release Reviews

By Mark Rumney on October 23rd, 2014

 

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It’s always a thrill to call my clients when their equity release application finally completes. That’s the time when they’ll receive their equity release proceeds and have the necessary funds to meet their objectives, such as home improvements, new car, helping their family or simply repaying debts. Although the application process has now completed, it’s actually the start of what should be a long relationship between the client and myself.

 

How Equity Release Supermarket can assist…

 

Here at Equity Release Supermarket we pride ourselves on the quality of our whole service proposition. Therefore, following completion of any application we always invite our customers to provide feedback as a measure of how their equity release has been handled. An equity release application can take on average between 6-8 weeks and during that time there are many steps we manage on behalf of our clients to make sure it’s transpires as smooth and as quickly as possible.

 

Our feedback request starts at the first stage of the equity release process which is where we provide the independent equity release advice governed by the regulation of the Financial Conduct Authority and following the Equity Release Council’s code of conduct. Thereafter, we ask for feedback regarding our administration team who process the cases and manage liaison between the client & solicitor & the lender. This aspect is of paramount importance to us as this governs the speed & efficiency of the whole application.

 

Feefo Equity Release Reviews

Feefo 100% Trusted Merchant

Our genuine online Feefo reviews illustrate our dedication to servicing equity release customers and its testament to the fact Equity Release Supermarket received the prestigious Feefo 100% Trusted Merchant Award for 2013. In fact during 2014 we are still on track for 100% positive Feefo reviews from our clients. By visiting the www.equityreleasesupermarket.co.uk website & clicking on the Feefo logo you can read how our customers view our excellent service & shows how our advisers will go that extra yard in order to provide their clients with our excellent customer service proposition.

 

As an example, one such review I received recently was as follows: –

‘I was really impressed how quickly Mark Rumney sorted things out for me and even though he was going on holiday this did not stop him. He made sure that everything was in place for me before he went, even well into the evening. So thank you Mark and I would definitely recommend your services.’

 

Continually Innovating – Equity Release

 

Today’s equity release schemes are very flexible, and clients circumstances can change, therefore I like to call clients annually to touch base, remind them of their options and review their situation. During the annual review I like to: –

 

  • Remind clients of the ability to make voluntary interest payments
  • Check whether any new products may be more suitable
  • Check whether interest rates have reduced and are still competitive
  • Check that interest only lifetime mortgage schemes are still affordable

 

Let’s look at each of these in turn…

 

Voluntary Interest Payments:

Both Aviva & Hodge Lifetime have equity release schemes which allow you to make voluntary interest payments of up to 10% of the original loan amount, once schemes have been in place for 12 months. This can dramatically reduce the outstanding balance at the end of the term, so it’s important we remind our clients of this and explain the mechanics of how they make ad-hoc payments to their lender.

 

New products:

New providers and products are often launched which may prove more suitable, although you need specialist advice when considering switching schemes. I offer a free initial consultation to complete a switch plan analysis in order to determine whether it is best advice to switch equity release plans.

 

For example, Pure Retirement launched a drawdown lifetime mortgage plan in 2014, which tends to offer the highest reserve on the market, with the possibility of receiving £1,100 in cashback that can cover all the remaining set up costs. This may therefore appeal to customers of older equity release schemes, as they can possibly switch to a lower rate at the same time as have a new cash reserve facility for future use.

 

We are also starting to come across former Halifax Retirement Home Plan mortgage customers where Halifax/Scottish Widows have declined further borrowings due to the new MMR rules on affordability. Fortunately, we have assisted some of these retirees with the new ‘interest servicing’ products from the likes of Stonehaven, More2life & the Hodge Retirement Mortgage. All these plans could be made available following a full equity release review, where if appropriate we can find a scheme that allows further funds to be made available.

 

Lower Interest Rates:

There are legacy equity release schemes out there from companies that formerly offered lifetime mortgages. These companies, however have since stopped offering new lifetime mortgage or home reversion plans. These equity release companies can include Norwich Union (now Aviva), Prudential, NatWest Equity Release, Portman etc.

 

Another legacy equity release scheme we commonly come across is Papilio UK Equity Release (formerly Northern Rock), where many existing customers could benefit from new equity release plans that offer lower interest rates. There are ex-Northern Rock customers that are being charged over 7% with Papilio UK. The Aviva Flexi Lifetime Mortgage Plan can currently offer equity release interest rates as low at 5.63% (5.83% representative APR). By switching equity release schemes I have saved my clients £1000’s in compound interest over the longer term. A good deal for them & their beneficiaries!

 

Check ongoing affordability

Some of my clients have taken out a lifetime interest only mortgage with either Stonehaven or More2Life. They’ve chosen to pay a fixed monthly payment for the duration of the plan. However, both plans offer the flexibility of being able to stop payments at any time and let the interest roll up. Similarly, with the Hodge Retirement Mortgage you’re also able to switch to rolled up interest when the younger borrower reaches aged 80. These are things that should always be discussed at annual reviews.

 

Overall, the annual review call that I make to clients can be really worthwhile. It’s always nice hearing how they’ve spent and enjoyed their money. It’s usually another common time when they ask me to call one of their friends and family who’d also benefit from my specialist advice, as their friends and family have seen how equity release has changed their lives.

 

Other areas where I receive many calls from existing clients, which impact the need for further equity release advice, can include:

 

  • Moving House
  • Death of one borrower
  • Additional borrowing

 

Looking at these in turn…

 

Moving House:

Most equity release schemes are flexible and allow you to move at any time. However, advice is needed with regards to value of you property you can move into. You’re also able to repay most schemes early but this could be subject to a variable, or fixed, early repayment charge.

 

Death of a borrower:

It’s obviously a distressing time when you lose a loved one. I often receive calls from the survivor asking what options they have or what happens next. I’m able to answer their queries and explain the simple process of informing the lender. The main query is whether the survivor can remain in the family home, where the answer is usually yes.

 

Additional Borrowing:

Most lifetime mortgage schemes are set up with an automatic drawdown facility where you can contact the lender when you need funds from an agreed reserve at outset. However, once this is exhausted, or if you’ve got an older scheme without a reserve facility, I often get telephone calls to check eligibility for additional borrowing. Here we can help & contact the lender to check whether further funds could be made available from the equity release company.

 

Summary

Remember, equity release schemes are designed as lifetime mortgage contracts and therefore you need to review your situation regularly. I pride myself in offering this unique bespoke service and many of my customers can vouch for the benefits.

 

Should you feel you may benefit from an equity release review of your existing plan, please contact me – Mark Rumney DipPFS CeMAP on: –

 

m: 07957 974826 or

e: markrumney@equityreleasesupermarket.co.uk

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