Equity Release

Do you need independent legal advice regarding equity release?

If you’re retired or approaching retirement age, you may be considering an “equity release” mortgage to unlock the equity that’s tied up in your house. An equity release mortgage (which can either be a “lifetime mortgage” or “home reversion plan”) can enable you to access this capital, without having to move.

These mortgage products provide for the borrower to receive a lump sum, which is secured by a mortgage over their property. Furthermore, in most cases, no monthly payments are due, and interest accrues and is added to the loan balance.

This is a complex area, and it’s now mandatory that homeowners who are planning to enter into an equity release arrangement receive independent legal advice from a solicitor, licensed conveyancer or chartered legal executive at a face-to-face meeting.  This is where we at ILA-Connect can help.

If you’re living with someone who owns the property you live in, and who is considering an equity release mortgage, you may need to take Independent Legal Advice in connection with waiving your rights of occupation. If that applies to you click here for the relevant page and to obtain a quote.

Why does Independent Legal Advice need to be sought?

Equity release mortgages are regulated financial products, and most companies providing these mortgages subscribe to the Equity Release Council’s Rules and Guidance, which lays down rules of best practice.

One of the key features of The Equity Release Council’s Statement of Principles is the requirement for equity release borrowers to receive Independent Legal Advice (ILA) from a solicitor before entering into an equity release product.

Obtaining independent legal advice on a proposed equity release mortgage is regarded as an essential aspect of consumer protection.  The intention is to ensure that there is always clear evidence that at least one face-to-face meeting takes place between the potential borrower and a solicitor, such that the prospective borrower has the opportunity to take independent and impartial advice before entering into an equity release mortgage.

In requiring borrowers to obtain ILA, equity release lenders are seeking to ensure that borrowers (and their beneficiaries) are made aware of the more onerous aspects of the equity release product they propose to take – including for example the effect of compound interest. This, in turn mitigates against the risk that the borrower or their family may subsequently argue that the product was mis-sold.

Once ILA has been obtained by a potential equity release borrower, a lender can usually be satisfied that the individual was aware of the full extent of their financial obligations with regard to the particular product they are committing to.

How can I obtain Independent Legal Advice?

Finding a solicitor who offers independent legal advice on equity release can prove challenging.

Despite rising demand for products and advice on equity release, it remains a particularly niche market. Individuals and lenders could spend considerable time searching for an advisor who offers this service. Alternatively, why not contact us at ILA-Connect? We’ve teamed up with legal practices nationwide who offer independent legal advice on equity release products, and so we can arrange ILA appointments with solicitors nationwide to allow you to obtain the independent legal advice you need, from a qualified solicitor who is local to you.

Simply get in touch with us at contact@ila-connect.co.uk or call our office on 0333 300 1879 to obtain a quote and for an appointment to be made with a solicitor in your local area.