People are asking are Lifetime Mortgages regulated, are they safe?
Regulation is by the Financial Conduct Authority, (FCA), the same regulator that has oversight over conventional mortgages, and financial services. Additional protection the FCA demands is advisers of Lifetime Mortgages must be specially qualified. Most Independent Financial Advisers and Mortgage Brokers do not hold the necessary qualifications so always look for a Specialist Equity Release adviser or Firm.
Because Lifetime Mortgage customers are older, minimum age 55, there is a further layer of oversight provided by the Equity Release Council, (ERC). They provide three guarantees:
The right to stay in your home for life.
The ability to move home if you want to.
A “no negative equity” guarantee.
These guarantees go to the second part of the question. No fear of repossession, and you can move home if you want to. Importantly, you cannot leave a debt to your beneficiaries. (Please see your Key Features Illustration for full details).
The ERC also states you must obtain independent legal advice when you proceed. Similar to a conventional mortgage but with additional safeguards. A home visit from the lawyers to assess competence, understanding and to check for potential vulnerability. They sign a certificate to say they are happy. No certificate and the application will not complete.
Finally, no completion, no fees payable other than legal disbursements already done.
Check out our previous article here.