Advanced Mortgage Services Ltd
We provide Independent Advice from the Whole Market
Advanced Mortgage Services Ltd is an appointed representative of The On-Line Partnership Limited which is authorised and regulated by the Financial Conduct Authority. Advanced Mortgage Services is registered in England. Company registration number 4751565.
Cherry Tree House, 20 Inverleigh Road, Bournemouth, Dorset, BH6 5HA.
Advanced Mortgage Services Ltd website is only for the use by UK residents & is subject to the UK regulatory regime.
There are four main costs associated with setting up any equity release plan.
Survey Fee – This is payable at the start when you submit your application. The amount usually depends on the estimated value of your property but is normally between 0.1% & 0.2% of the property value. Sometimes it is possible to get a free valuation but this will be dependant on special offers made by providers from time to time.
Application - Arrangement Fee – This is payable directly to the equity release provider when your plan completes. This can either be paid from the funds released or added to your loan. This fee is typically £500 to £800.
Legal Fee – All SHIP (Safe Home Income Plan) members insist that you receive independent legal advice from a solicitor. Your solicitor should offer a fixed fee for this service of between £350 and £500.
Advice - Application - Processing Fee This fee is charged by the Equity Release adviser company and can either be a fixed fee or a percentage of the amount released and typically ranges from £500 to £1500.
Advanced Mortgage Services Ltd does not charge for an initial meeting to discuss the options which could be available you.
After the initial meeting if you would like us to carry out a full client review and to independently research the whole of the Equity Release market to find the best available product to meet your needs a fee of £245 would be charged for this service. We will then make a personalised written report and recommendation. The recommendation will be accompanied by detailed key facts illustrations personalised to show details of the amount required direct from the appropriate equity release provider.
The illustration will detail all costs associated with the initial set up and long term interest costs in reference to Lifetime mortgages.
If we feel that an equity release is your best option and you wish to proceed with an application we can help you with the application process, documents, tracking, and assist with any issues that may arise.
A fee of £250 will be charged on completion for this service and we may also receive an amount paid by the equity release company for introducing and arranging the equity release.
Costs involved with Equity release can be separated into two parts. First is the initial set up costs and second is the long term costs. The long term costs are different depending on which type of equity release product is chosen.
What Does it Cost
Long Term Costs
Long term costs are probably the most important considerations when taking out an equity release product as these can grow to a considerable amount. The total costs can not be easily established as this will depending on how long the period is before the property is eventually sold and the equity release is repaid.
With a Lifetime Mortgage the amount initially borrowed accumulates interest over time and can grow significantly due to the effect of compound interest. This is where interest is charged on interest already accumulated. As an example if someone was to release £46000 at a fixed interest rate of 5.99% (Annual Percentage Rate 6.16%) then after 10 years the amount owed would have grown to £83,609 and after 15 years the amount owed would have grown to £112,844. Set against this you would still own 100% of your property and benefit from 100% of any increase in property value.
With a Home Reversion Plan part or all of the property is sold to the Reversion company normally at a significant discount of 50% to 60% depending on the applicants age. Any increase in property values will be shared between you and the Reversion company.
As an example if the property value is £250,000, the Home Reversion company may require a discount of say 55% to be applied. The discounted property value would then equal £112,500. If you require an amount of £46,000 this would equate to approximately 41% of the discounted property value. You would have £46,000 to spend but you have sold 41% of your property and forgone any future growth on this part of the property. Again the total cost is unknown as are the future property prices or how long it is before the property is sold.
As you can see from these examples, Equity Release can be very complex and qualified advice should always be sought before making a final decision.
Many other factors will also influence your decision which could include how old you are and if you want to leave an inheritance. will you need more money in the future, are you making significant home improvements. Are you likely to want to move or do you have family locally. All these need to be considered before making a final decision and you will likely need some professional advice.
Equity Release Risk Warning.
Lifetime mortgage, or home reversion plan.
Equity release may affect your entitlement to state benefits and could reduce the value of your estate. To understand the features and risks, ask for a personalised illustration.
Please think carefully before securing other debts against your home.
Your home is at risk of repossession if you do not keep up repayments on a mortgage or any other loans secured on it and you should think carefully before securing any debts on your home