Category Archive Equity Release

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Accountants, Lawyers and IFAs – A Team Approach

Business people making introductionsFinancial, legal and tax advice are areas conducted by professionals adhering to their own sets of standards and qualifications, with their own professional bodies and regulators.

These advice professions are no different to other business sectors though when it comes to facing growing pressure to retain their existing clients, and more importantly, to win new clients and discover sources which will provide those new clients.

Legislation such as the Legal Services Act (LSA) and the Retail Distribution Review (RDR) has forced the legal and financial advice professions to introduce more client centric business models and, at the same time, become more competitive. This in turn has created a growing pressure for these advice professions to diversify and expand their business propositions in order to be more competitive.

Working more closely and proactively with a professional IFA can provide a very simple but effective solution to this problem.

Given the overlap between many areas of tax, legal and financial advice, a number of firms have seen the potential for Accountants, Solicitors and Independent Financial Advisers to work together to leverage each other’s client relationships. It provides those clients with a more holistic, joined-up and value-added approach to advice, and at the same time resolves the challenges of retaining existing clients and finding a source of new clients.

If you would like to find out how Money Advice & Planning can add value to your business and your client relationships, please visit us at www.mapfinances.co.uk and use the contact form. Alternatively, call your local MAP adviser at a time which suits you.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority.

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Why getting the right advice is so important

Speak to a financial adviser who can help youEstablishing a relationship with an Independent Financial Adviser (IFA) you can trust to handle all of your financial needs is critical to achieving your financial goals. Not all Financial Advisers are the same, so you must beware!

The two main types of financial adviser are those who are independent and those who are not. All advisers must tell you what services they offer from the outset. To be called an Independent Financial Adviser, they must be able to offer a broad range of retail investment products, and give consumers unbiased advice based on a comprehensive analysis of the market.

Restricted or tied advisers on the other hand can only recommend certain types of investment products or products from a limited number of providers (possibly only one if tied). It is important to establish at the outset what type of advice an adviser can offer, to ensure you get the best investment(s) to suit your needs and requirements.

All advisers must be properly qualified to give financial advice and hold the Diploma in Financial Planning, or an equivalent qualification. Advisers must also prove that their knowledge is up-to -date through continual professional development (CPD).

Some types of advice require an adviser to have specialist qualifications – pension transfers and equity release for example. Any companies offering these services should have advisers within their ranks who are suitably qualified to provide advice in these areas.

Advisers must also be transparent in the fees they charge for both initial and ongoing advice and services.

As a valued client of Money Advice & Planning Ltd you can rest assured in the services we offer:

  • Non-restricted advice and planning – no matter what financial advice and products you need, we can help.
  • Face-to-face advice from UK-wide trusted advisers – irrespective of where you are in the UK, one of our advisers will be happy to meet you and discuss matters face-to-face.
  • Fees structured to suit requirements – financial advice should never take on a ‘one size fits all’ approach and our fees will be structured and mutually agreed to suit your needs.
  • Tailored service packages – we don’t believe in one-off financial advice and have several service packages available, so your financial affairs are reviewed throughout your journey with MAP.
  • Whole of market non-discretionary investments – our bespoke investment strategy will cater for your needs and requirements, and give you an investment right for you.
  • Quarterly investment reviews – our proactive analysis of fund performance ensures you are always invested in the best areas to suit your attitudes to risk.
  • Recommended funds – we invest using recommended fund lists, which have been tried and tested to deliver successful returns for our clients.
  • Transparency and peace of mind – clients have 24/7 access to their investments through the MAP portal, so they always know how their investment is performing.

Perhaps most importantly of all, we come tried and tested. Read the reviews of just one of our advisers and see for yourself.

The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent professional advice for your own particular situation. Money Advice & Planning Ltd is authorised and regulated by the Financial Conduct Authority.

Bymapfinancesadmin

Equity Release

Is your house more valuable than you thought?If you are over the age of 55 and in need of equity for whatever reason, but want to avoid costly loans, you should consider equity release.

Equity release is the process of remortgaging to release money (equity) from the value of a home, for immediate use.

This money can then be taken as either a lump sum or through smaller payments, i.e. a monthly income and used for whatever purpose.

The maximum amount which can be released is relative to the property value, and is effectively deducted from the selling price when the property is sold, as that ‘portion’ of it is already deemed to have been sold to the equity release provider.

There are two different types of equity release available – lifetime mortgages and home reversion – and both operate in different ways, making them more applicable for certain circumstances.

MAP can help you release invaluable capital from the equity in your home.

If you are a homeowner over 55 and are concerned with ongoing living costs or are looking to make an expensive purchase or gift, talk to one of our equity release specialists. We have access to the entire UK market, so can determine the right route for you and the best lender, if indeed equity release is the best option for you.

Also, if you have undertaken equity release already but are looking to move home, we can take care of the ‘transfer’ between properties, to ensure minimum, or no, extra costs are incurred.


For more information, click on the most suitable link:

Lifetime Mortgages
Home Reversion

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Our Services

Our services and why they can helpIrrespective of what you need to speak to a financial adviser about, MAP will be able to find the best solution(s) to meet your needs. We are fully independent meaning we can advise you on any of the following, taking into consideration your attitude to risk and all options available in the marketplace:

Any and all of these solutions can be provided to you through sound financial planning. By this, we mean structuring a personal financial plan after getting to know you and understanding your goals.

Furthermore, we will stay with you throughout your financial journey, for as long as you need us. Our regular review service will ensure your finances stay on track and continue to reflect what you need, want and expect.

Whatever advice you need for your financial journey, talk to MAP.

Bymapfinancesadmin

What is Equity Release?

Is your house more valuable than you thought?

Equity Release is a mechanism to release capital from the value of your property. In simple terms, it is a mortgage, but one that you don’t have to repay during your lifetime.

Whilst many different terms are used to describe Equity Release products, they all fall into one of the following categories:

  • A lifetime mortgage; and
  • A home reversion.

Lifetime Mortgage

Lifetime mortgages work very much like standard mortgages most people will already have experienced. The homeowner continues to own the property, but a mortgage (called a charge) is put over the property and this is registered on the property deeds at the Land Registry.

These details are public records although only the name of the lender is registered, not the amount owed. This prevents the property being sold without the mortgage being repaid because the purchaser’s solicitor will be aware of the charge and will need proof that it has been cleared before the property transfers to the new owner.

Lifetime mortgages can be separated into either interest-only mortgages and roll-up mortgages.

Interest-Only Mortgages

Are mortgages for life where the borrower pays the monthly interest on the debt. These can be fixed rate or variable rate similar to standard mortgages. The benefit of an interest-only mortgage is that the size of the debt never grows. The main issue is that the borrower will have less disposable income after the mortgage is in place and will have to undergo affordability tests to ensure they can maintain payment of the monthly interest. Most interest-only mortgages can be switched to a roll-up mortgage after the borrower reaches a certain age; normally 80.

Roll-Up Mortgages

Roll up mortgages require no repayments whatsoever. The interest that accrues on the debt is added to the debt each month and the size of the debt therefore increases over time. The benefit of a roll-up mortgage is that there are no repayments and, therefore, no affordability tests are carried out. The main negative is that the size of the debt can grow substantially over the lifetime of the mortgage and could completely wipe out the value of the property meaning nothing can be left to a beneficiary on death.

This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.

Home Reversion

A home reversion is not a mortgage because the ‘funder’ purchases a fixed percentage of the property for an agreed price. The price is highly likely to be below current market value because the funder anticipates having to wait a long time before they can realise their investment. When the purchase is finalised, the funder will be listed on Land Registry as a part owner of the property – referred to as a ‘Tenant in Common’.

With Home Reversions, there are no regular payments to make but the funder owns a fixed percentage of the property and, when it is eventually sold, will receive that proportion of the proceeds of the sale. It should be noted that the funder will have control of the sale and will have control over the final selling price. This prevents the owner’s estate from selling cheap to a relative or beneficiary, for example.

Home Reversion is particularly suitable when the homeowner is not particularly concerned about leaving the actual property to a beneficiary and doesn’t want regular payments to make during their lifetime but does what some certainty about the value of estate they will be leaving.

Who Can Do Equity Release?

Theoretically, anyone age 55+, but the younger the applicant, the lower the amount that can be raised. The sweet spot age is 75+ when many lenders will offer immediate roll-up deals.

Are There Any Issues?

When considering Equity Release there are a few things to be careful about. Firstly, any lifetime mortgage taken out should come with a ‘no negative equity guarantee’. This means that the value of the debt can never exceed the value of the property. For example, with a rollup mortgage, there is a risk that the debt could rise to be greater than the value of the property meaning, when the property is sold, the debt would not be fully repaid and the difference would need to be made up from other assets in the estate. If possible, a mortgage that is Equity Release Council (ERC) approved should be sought. All ERC approved mortgages will come with the no negative equity guarantee, along with some other guarantees; mainly concerning fees and charges.

Another significant issue to consider is whether the homeowner feels they may wish to move or downsize at some point. Most ER products will allow the borrower to move and take the mortgage with them; all ERC approved products will. However, if the new property has a lower value than the original (maybe the owner is downsizing with the intention of releasing capital) there is a risk that part of the capital already advanced may need to be repaid; in the extreme, this could wipe out the capital the borrower is trying to release by downsizing. The reason this occurs is that the lenders will only advance on a limited percentage of the property value. Whilst this percentage does increase with age, if the new property has a lower value, the outstanding debt may form too large a percentage of the new property value. In these circumstances, the homeowner could still move, but would need to repay the difference between the outstanding debt and the maximum that could be raised on the value of the new property.

The final major issue to consider is care. Whilst ER products are designed to be for life, they also terminate on the event that the borrower moves into full time care. With a joint product it would be when the second borrower moved into full time care. At this point, the property would be sold and the debt repaid.

The fact that it is possible the property may need to be sold before the end of the borrower’s life if they move into full time care can cause some inheritance planning issues. For example, a borrower may have a whole of life insurance policy with the intention that the policy proceeds would repay the debt on their death and the property could still be left to a beneficiary. The risk is that the repayment of the debt is triggered by the borrower being taken into full time care. At this point the proceeds of the life policy are not available and, unless there are sufficient other assets to repay the debt, the property would be sold.

Appropriate Advice

Equity Release can form a critical and extremely useful part of later life financial planning but it is essential that the right product is selected that meets the current and reasonably envisaged future needs of the borrower. It is therefore essential that advice is sought from a suitably qualified equity release advisor. MAP has a number of qualified equity release advisors all of whom are also fully qualified general financial advisors giving them the breadth of knowledge to understand not only which product would be appropriate, but how this would fit with a client’s other financial requirements.

For equity release advice, we charge an adviser fee dependent on the loan amount, as invariably larger loans require more time and effort to complete:

  • Loans up to £200,000 incur a £595 charge; and
  • Loans up to £200,000 incur a £795 charge.

For further information on how MAP may be able to assist with your equity release needs, please contact us on 0345 241 1808 or email us at: enquiries@mapfinances.co.uk.

Bymapfinancesadmin

Your Goals

Getting your finances right can help you achieve your goalsOur client’s goals are what drive us to do our utmost for them. Your financial goals will become our targets.

We understand that for any and all aspects of your finances, a number of factors are important. Good advice at both the outset and on an ongoing basis, careful planning and successful investing will help you and indeed your money reach your financial goals.

Our approach has been tailored over many years of looking after client’s wealth, and has been structured to suit their needs and service requirements. We do the total opposite of a ‘one size fits all’ approach.

The values we bring as a financial adviser to any client are:

  • Quality – differentiating ourselves from competitors by delivering quality in everything we do;
  • Ownership – dealing with clients finances as if they were our own;
  • Expectation – exceeding client expectations by going above and beyond what was hoped for;
  • Trust – building trust with clients which lasts a lifetime; and
  • Transparency – being open, honest and clear in everything we do.

Our clients choose their financial destination and we MAP out the journey for them.

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Why Choose Us

We will find the answers to your financial questionsThere are many reasons to choose MAP for independent financial advice:

  • Non-restricted advice and planning – no matter what financial advice and products you need, we can help.
  • Face-to-face advice from UK-wide trusted advisers – irrespective of where you are in the UK, one of our advisers will be happy to meet you and discuss matters face-to-face.
  • Fees structured to suit requirements – financial advice should never take on a ‘one size fits all’ approach and our fees will be structured and mutually agreed to suit your needs.
  • Tailored service packages – we don’t believe in one-off financial advice and have several service packages available, so your financial affairs are reviewed throughout your journey with MAP.
  • Whole of market non-discretionary investments – our bespoke investment strategy will cater for your needs and requirements, and give you an investment that’s right for you.
  • Quarterly investment reviews – our proactive analysis of fund performance ensures you are always invested in the best areas to suit your attitudes to risk.
  • Recommended funds – we invest using recommended fund lists, which have been tried and tested to deliver successful returns for our clients.
  • Transparency and peace of mind – clients have 24/7 access to their investments through the MAP portal.

Perhaps most importantly of all, we come tried and tested – read the reviews of just one of our advisers and see for yourself.

Wherever you are on your financial journey, let us provide the MAP to your desired destination.