Why it's important to shop around
for the right Equity Release deal
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Last update : November 2011
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It is critical to shop around for an Equity Release plan as is shown by a mystery shopper exercise which was carried out by the charity Help the Aged.
Mystery shopping is where an organisation sends people out incognito to test the market to see what kind of service is being offered and promoted.
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- Help The Aged used a '76-year old man' to call 7 of the leading Home Reversion providers to talk about what they could offer
- The man wanted to release £80,000 from a property valued at £280,000
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A Home Reversion plan is where you sell your home or a percentage of it to a Reversion company but retain the rights to live in it rent-free for the rest of your life.
The payouts range between about 20% - 60% of a property's value and depend on many factors, the main one being the age of you and your partner. The older you are the more of a percentage you'll receive and vice versa.
The difference in percentage between how much the each provider would pay for the property was staggering.
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- The worst value firm wanted to take 62% of the property in exchange for £80,000
- The best deal offered was 48.5% of the property's value
- The difference between the two is an extremely significant £37,800
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| Summary - The importance of shopping around combined with plenty of research is therefore critical to those thinking about an Equity Release plan. See also Equity Release Costs.
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FREE Equity Release Guide
- This LearnMoney guide offers a simple 5 Step process outlining exactly how to properly research the Equity Release market
- It make sure you ask the right questions and get proper answers
- Concentrates on the all-important costs and flexibility of the different Equity Release schemes
- More details and to download your FREE copy
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Read more in the Equity Release section:
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