New home equity release code good
Age Concern Media release 2 September 2008
New home equity
release code good, but think carefully before
Age Concern New Zealand welcomes the government's new Code of Practice, but warns that home equity release contracts still need careful thought.
“The new Home Equity Release Products Code of Practice, approved by cabinet and launched by Minister Ruth Dyson today, provides many of the protections we asked for,” Age Concern New Zealand chief executive Ann Martin says.
"We're delighted that older people will be getting protection through the voluntary Code of Practice and look forward to seeing it supported by legislation.
"Anyone looking at Home Equity Release (HER) loans should read the Code and check that the lender supports all of it. If they don’t; then ask why not, very strongly.
"We welcome the Code's emphasis on information and full disclosure. Older people's homes are usually their greatest assets; so they need to be very well-informed before signing anything."
Age Concern is pleased to see that guarantees will be required so older people aren't faced with being removed from their own homes when their money runs out, and looks forward to more information on the proposed independent disputes resolution process.
"Our caveats about HER still apply," Ann Martin says. "It lets seniors use equity they've built up in their homes, but it also limits their options. If they want to move in a few years, they may not be able to.
"The current state of financial markets means that more caution than ever is needed.
"We advise older people needing extra income to look at as many alternatives as possible before making a decision."