No Fee Equity Release – Equity Release Without Advice Fee

If you want advice for all things equity release, then you will need to speak to a qualified equity release adviser.

Unfortunately, most equity release advisers will charge you a fee for their advice, which is either charged upfront or at the end of the equity release process.

However, your equity release adviser might agree to waive the advice fee, under certain circumstances, for instance, if you are looking to release more than a certain amount, say £50,000.

This is because the advisor can then be certain he or she will be able to cover their costs via the commission that’s received from the lender.

We want to stress that wavering the advice fee is very much on a case-by-case basis, and the complexity of your release will come into play when an advisor is deciding whether or not to waive the advice fee. We can offer general guidelines, but not absolute rules.

It’s also important to realise that, generally, and from an FCA perspective (the regulator), if the advisor is to base the decision to waive the advice fee merely on the value of your loan, it could be seen as an incentive to borrow more money to get free fees. For this reason, the decision to waive fees will be based on a variety of factors not just linked to how much you borrow.

And generally speaking, paying an advice fee gives you access to experienced quality advisers who know their stuff, rather than newcomers who may be prepared to waive fees freely.

To learn about equity release without paying an advice fee, contact us today on 0330 058 1579.

Types of fees involved when you release equity

Releasing equity from your home is an affordable way of gaining access to cash, although there are a number of fees involved. Below is a list of just some of the common fees associated with equity release.

These include:

• Home valuation fees
• Arrangement fees
• Solicitor fees
• Advice fees

Most equity release advisers charge and advice fee to cover these costs. However, the advisor also receives a commission from the lender, and this commission is based on the amount you are hoping to release.

This will usually be anything between 1% and 2% of the total loan amount.

Therefore, if you are releasing a sufficiently large amount of money, then the advisor may agree to waive the advice fee, given the fact he or she will be able to make a profit for the time involved in processing your application. However, this will not include the solicitor’s fee, which you still have to be paid by yourself.

Equity Release Fees FAQs

As discussed above, there are numerous costs associated with taking out an equity release mortgage. Some of these costs are discussed further below [2,3].

1. Solicitors’ fees

In addition to advice fees, you will also have to pay your solicitor. Usually, the amount you have to pay your solicitor depends on the nature of your loan, how complex it is and how expensive your solicitor is to hire.

This can be anything between £1,000 and £3,000 to process an equity release application and loan [2].

Most solicitors working on equity release matters charge around £1600 for this type of work. However, you are fully entitled to shop around and find a solicitor who can complete the work more competitively.

You will probably find a solicitor willing to do the work for less than £1600, but you need to make sure the solicitor is conducting equity release work regularly, because it is a forever changing area, and we generally would not advise you to instruct a solicitor who is not familiar with this type of work.

It is typically advisable to pay the going rate, and make sure the work is carried out to the highest standards. We’ve seen people attempt to save on solicitors’ costs in the past, and this did not always lead to a satisfactory outcome!

2. Interest rates

Naturally, taking out a loan will involve interest. You will be charged interest if you opt for a lifetime mortgage, but will not be charged interest if you opt for a home reversion plan.

You do not need to repay the interest on your loan each month if you do not want to, although you can opt to do so to keep the compound interest at bay. Your interest rate will depend on which lender you opt for [3].

As you can see, there are a number of costs associated with taking out an equity release loan. So, if your equity release adviser is willing to waive their advice fee, this could save you some money.

3. Valuation fee

We have agreed free valuations with all providers so you will not have to pay any upfront fees on new business, If your property is above £5,000,000 then some providers may ask for a contribution to the costs but generally it will be a free valuation. If you already have a plan and want to apply for a further advance then most providers will charge a small re-valuation fee.

4. Arrangement fee

This may or may not be charged by the product provider (Lender) Most plans have no arrangement fees but some lenders such as Legal and General have plans that give you a lower interest rate if you are happy to pay an arrangement fee. Our advisors will calculate which option may save you the most money over time.

It may be beneficial to pay a small fee generally between £500 to £995 to obtain lower interest rates or some special features not broadly available. Paying no fees is not always the best option. This is the same as the conventional mortgage market were many products have arrangement fees.

Our advisors will research the whole of the market and provide a recommendation for the solution that gives you the best outcome.

5. Advice Fee

Our advisers offer free initial advice and will have as many meetings as required to make sure both you and any family involved are happy to accept their written recommendations. They will make applications on your behalf and only charge any agreed fees if you complete an application to release any funds. No upfront fees are payable and any fees may be added to the funds released.

To learn about equity release without paying an advice fee, contact us today on 0330 058 1579.

What are the alternatives to equity release?

If equity release is not for you, perhaps because of the fees involved, then there might be some alternatives which suit your needs and personal circumstances better, which do not involve as many set-up costs [4].

1. Downsizing

Selling up and downsizing your home is often the best alternative to equity release. By doing so, you will have left money proceeds from the sale of your home, which might be enough to live off during your retirement.

The only set-up costs associated with selling your home and downsizing are home valuation and solicitor fees [4].

2. Rent out a room

Renting out a room in your home is another great alternative to equity release, which could provide you with an income during your retirement [4].

There are virtually no set-up costs involved in this option unless you want to get a formal contract drawn up by a solicitor.

Whilst the thought of renting out a room in your home can be daunting, it doesn’t have to be to a stranger. You can rent a room to someone you know, like a family friend or relative.

3. Get a retirement job

Finally, getting a retirement job is a popular alternative to taking out an equity release scheme [4]. You might opt to work part-time and should choose a job that isn’t physically or too mentally demanding.

What to do if I am struggling financially?

If you are struggling financially and equity release is not an option for you, then there is a lot of support and help out there for you.

If you are struggling to pay your bills or are worried about how you will afford to live during retirement, then it is important to remember that you are not alone.

Citizens Advice is a great place to start, as they will be able to provide you with immediate help and support, along with information about what you might be eligible for.

There are also many charities that will be able to provide help and support, including Step Change and National Debtline.

References

[1] https://www.equityreleasewarehouse.com/help-centre/is-equity-release-right-for-me/

[2] https://www.telegraph.co.uk/financial-services/retirement-solutions/equity-release-service/equity-release-interest-rates/

[3] https://www.equityreleasewarehouse.com/help-centre/what-does-equity-release-cost/

[4] https://www.equityreleasewarehouse.com/help-centre/what-alternatives-equity-release/