Claire Barker, Chairman of the Equity Release Solicitors Alliance (ERSA) comments on the FCA report into interest only mortgages and the importance of expert advice:
“While the majority of interest only borrowers have a payment plan to cover any shortfall, there is still a significant minority who have no plan in place and who may not be fully aware of the scale of the gap they face. For these people, equity release may provide a solution and an alternative to downsizing. For those looking into equity release, it is vital they seek specialist advice to understand the full implications of any product they take out.
“Rightly, it has been pointed out that mis-selling is not the cause of the problems with interest only mortgages. That said, there does appear to be a portion of people who didn’t fully appreciate the implications of the agreement they were taking on, which indicates a failure in the advice given which I’d expect using a specialist would have avoided. When taking out financial products of the magnitude of a mortgage or equity release product, specialist advisers and expert lawyers are fully equipped to ensure all parties understand the agreement and should be the first port of call.”