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Equity Release Update - July 2013

Reviews

Following on from my previous 2 newsletters, this month I am looking at the Hodge Lifetime plan from the legal perspective, highlighting to you aspects which you may want to forewarn your clients about during your discussions with them.

In comparison to other lenders (such as Aviva, Stonehaven and LV) the volume of legal paperwork that the client has to sign is substantial and includes a 12 page offer, mortgage deed and several other forms.

Even though you may have submitted ID to Hodge Lifetime you will still be required to send proof of ID and address to their Solicitors. In addition to this you will also have to supply a recent bank account statement (either in joint names or one for each borrower) to Hodge's Solicitors.

The legal disbursements do tend to be slightly higher than some other lenders as we are required to carry out various Land Registry searches and it is often the case that Hodge require copies of documents referred to in the deeds which can cost £20+.

For leasehold properties most lenders are happy to be supplied with just the name and address of the Landlord. However, Hodge (and New Life) insist we make contact with the Landlord and ask quite probing questions. So if you are seeing clients who wish to keep their affairs private then you may want to warn them that their Landlord will be contacted and asked questions around compliance with the lease and service charges. Obviously contacting the Landlord may cause a delay and the Landlord may charge to answer these queries (sometimes as much as £200).

At Ashfords we have noticed that Hodge Lifetime do their own searches on the property and will often come back about nearby developments - again often causing delay. If you notice any nearby developments when visiting the client you may want to make some gentle enquiries.

Overall the legal process and Solicitors of Hodge are excellent. The above items are really just to highlight to clients if relevant and if you feel that it is something they may benefit from being forewarned of.

News

05.06.2013 - Bridgewater launch sales aid to assist advisers with clients who are divorcing, including case studies and examples to help people use various equity release plans to buy one partner out of the property.

10.06.2013 - EU Solvency II threatens equity release. Towers Watson warns that Solvency II does not recognise the ability of equity release assets to match long-term insurance liabilities.

14.06.2013 - Bridgewater report shows that those taking ER to pay for long term care has risen from 1% to 10%.

20.06.2013 - Poll results show that 77% of those polled feel the ERC should target the media and consumers.

20.06.2013 - Kent Reliance to offer an interest only mortgage this summer.

20.06.2013 - The ERC hits out at interest rate complaints at the Retirement Planning summit.