Equity Release Consumers Flashcards
(10 cards)
What are the three main ways in which the proceeds of an equity release plan can be used?
1) To meet an immediate need
2) To meet needs both now and in the future
3) And to provide a source of income
What is meant by the term drawdown in relation to equity release plans?
The customer takes only what they require to meet their immediate needs. This gives the customer a piece of mind knowing there are further funds on which to draw on in the future.
How much is the residence Nil-rate band?
175,000 for someone who leaves their main residence to a direct descendant
From the advisor’s perspective the decision regarding the suitability of equity release in general and the choice of a specific product will depend on which six factors
N P&FC P O A2R A
1) The customers needs
2) their personal and financial circumstances,
3) their preferences,
4) their objectives,
5) their attitude to equity risk
6) and their aspirations
How does taking out a lifetime mortgage affect a persons estate on death?
The amount borrowed plus accrued interest would be the debt against the estate and would have to be repaid upon death
What are the downsides of leaving the proceeds of an equity release plan on deposit in a bank of building society account?
Holding the cash on deposit could affect the customers right to means tested benefits and may also affect the married couples allowance
What is the typical minimum age at which someone could apply for a lifetime mortgage?
The minimum age for a lifetime mortgage is 55
Why are older homeowners often described as asset rich but cash poor?
The family Home has always been seen as most people’s largest capital asset and in this situation it has been exaggerated by rising values. However pensioners are often cash poor as many have limited income. .
What is trading down and why are some older homeowners reluctant to do it?
Trading down is to sell a property and move to a smaller cheaper property in some cases moving could cause emotional strain
Why might a retired individual require a larger emergency fund than someone still in Work?
People of retirement age face the increasing likelihood of ill health or mobility problems and some retired people may want to pay for private medical treatment
