Planet Funds

Many Britons who own homes are attempting to enhance their disposable incomes through equity release, according to intune group.

People are turning to equity release products to make payments on their credit cards and mortgages, as well, according to Mark Gettinby, finances director of the Help the Aged subsidiary.

He urges people to speak with an expert before making a decision, however.

Many people do not understand the details of equity release plans, says Mr. Gettinby. They will be better served if they get professional advice before continuing.

Dean Mirfin, business development director for Key Retirement Solutions, agrees with Mr. Gettinby, saying borrowers, especially retired homeowners, can avoid paying too much if they speak with a loan professional first.

Retirees may not get the best advice or find the best deals from equity release providers who mostly interested in making a sale.

Homeowners may not see savings on their mortgage payments in spite of additional cuts in the base interest rate this year, says one expert.

According to David Kuo, head of personal finance for the Motley Fool, the Monetary Policy Committee’s decision to keep the base rate unchanged may or may not have an impact on mortgage rates. That relationship has not been firmly established.

Lenders have been encouraged to pass December’s rate cut on to borrowers by Chancellor Darling.   Mr. Kuo warns, however, that mortgage loan providers are not required to pass savings on to borrowers, and given the current economic climate, many may choose not to do so.

At the moment, many lenders are focusing on returning their business to better health.

While experts predict that the Bank of England may institute further cuts in answer to the current economic slowdown, homeowners will probably not feel any benefit from those cuts.

There is a strong possibility that personal insolvencies will increase this year, according to James Falla of Thomas Charles & Co.