Equity release loans, or lifetime mortgages, have become increasingly popular over the course of the past few years, as more and more people use them to provide additional funding for their retirement, or to repay existing loan debts.
Despite their growing popularity, equity release loans are still a very complicated and potentially high risk loan product and as a result of this, it is advisable for those home owners who are considering taking out an equity release to seek professional advice from an independent financial adviser.
According to the latest figures from the equity release loan trade body SHIP (Safe Home Income Plans), around 90 per cent of all equity release loans taken out over the course of the fourth quarter of last year, were done so by using the services of an independent financial adviser (IFA).
This amounted to a total new loan amount of £193.3 million, where the borrower took advice from an IFA before choosing a loan deal, compared with just £22.6 million worth of loan sales which were sold directly by loan providers.
SHIP said that this was the highest percentage of new loan business written by loan brokers and IFA’s since their records were first kept, back in 2003, which highlights how seriously people are starting to value professional advice in such matters.
Apart from being able to advise on the most suitable provider for an equity release loan, an IFA can also give valuable advice on whether or not an equity release loan is the right product for a particular individual.
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The irony of the last few years is that when mortgage rates were high and housing over-valued, customers were lined up around the block to sign on the dotted line. Now, with a 3.88 percent fixed rate on a 30-year mortgage waving in the wind lenders are having trouble finding customers. A deal that good may never come back again, as the economy rebounds, but that doesn’t matter when high unemployment, tighter lending criteria, and just plain homebuyer fear rules the housing market. Gone are the years when a piece of property was seen as a solid investment. Many buyers and banks are seeing it for the risk it can bring also in overleveraged debt and falling prices. However, in the last recession, it has become obvious to the public that they carried more than their fair share of the risk while the banks got a huge bailout and few negative consequences for their actions.
Refinances Also Affected
New home sales have plummeted, but the market for refinancing is also taking a hit for a variety of reasons. E
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We’ve seen the political and financial elites paint lipstick on a pig before. But never anything like this!
Consider the pig in Washington: Uncle Sam continues to run the worst deficits — and borrow the most money — since America’s war for independence.
And yet Congress has virtually given up on any semblance of a long-term solution.
In any other world or time, Uncle Sam would be paying through the nose to borrow money, driving interest up all over the U.S., and causing havoc in the stock market.
The lipstick: The Federal Reserve continues to paper over the disaster with the wildest money printing of all time … PLUS … the most sustained zero-interest policy in U.S. history.
The result:
• Conservative savers are being squashed, earning a pittance for their hard-earned funds.
• Investors are again being herded into highly speculative deals.
• And ne
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— Alexander Marian @ 11:27 am — 
February 9, 2012