Equity Release Process
Equity Release Process
Don’t miss the chance to revolutionise your retirement finances.
The equity release process may seem complicated, but it’s simpler that you think.
We’ll guide you through how it works and make it super easy for you to understand.
In this article, we’ll take you through:
- What’s the equity release process?
- How to apply for equity release?
- How to speed up your equity release application?
- What can slow your application down?
EveryInvestor has evaluated market-leading equity release plans from prominent providers to bring you this easy-to-understand guide to equity release.
Let’s get into it!
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What’s the Equity Release Process?
The equity release process is a step-by-step procedure that starts when you consult with a financial adviser about getting equity release.
During discussions with your equity release adviser, you’ll be presented with suitable products to address your needs.
Once you decide on a provider, your adviser will submit your application to them.
Application submission is then followed by a surveyor being appointed to conduct a property valuation on your home.
Upon receipt of the report from the valuator, your provider will determine how much equity can be released from your property.
Your provider then sends a final offer to your appointed solicitor so it can be presented to you for acceptance and signature.
Your provider’s solicitors then set a completion date after completing their checks.
On this date, your money will be released to you to use as you wish.
How Long Does the Equity Release Process Take?
The equity release process takes 4 to 6 weeks to complete if you apply for a lifetime mortgage.
A home reversion application takes 8 to 10 weeks; if the title to the property is not in the clear this timeline will be longer than the 8 to 10 week period.
Keep in mind that the length of the application process will also depend on how much experience your legal team has in conveyancing for equity release plans.
As such, the process for lifetime mortgages and home reversion schemes can take up to 12 weeks.
How to Apply for Equity Release: A Step-By-Step Guide
Here is a step-by-step guide on how to apply for equity release:
Step 1 – Choosing Your Financial Adviser
Your financial adviser is critical to the success of your application, so make sure you choose an expert who specialises in equity release.
- Getting to know you – Your financial adviser will have an initial meeting with you to determine your expectations around timelines, your budgetary details, and what your financial health looks like.
- Research – They’ll then go and do their homework and find the products most suited to your needs, allowing you to access your home’s equity efficiently.
- Giving you the options – In your next meeting with your adviser, you’re welcome to bring trusted family along. They’ll now recommend a scheme to you, go through its pros and cons in detail, and answer any questions you have.
Step 2 – Choosing an Equity Release Provider & Plan
With the assistance of your financial adviser, you’ll then select an equity release provider and plan; at this stage, if equity release is not for you, they may recommend an alternative.
- Lifetime Mortgage – A lifetime mortgage is a loan secured against your home; you retain home ownership and live in your property. It doesn’t need to be repaid until you pass away or move into long-term care.
- Home Reversion – With a home reversion scheme, you sell all or part of your home in return for a cash lump sum, a regular income, or both. Your home, or the part of it you sell, now belongs to your provider. However, you’ll enjoy lifetime tenure, rent-free.
Step 3 – Preparing Your Application
Preparing your application is next.
Your financial adviser will assist you in getting your application correctly completed.
Your application has to be completed with your provider’s help, as it’s a regulatory requirement from the Financial Conduct Authority (FCA) that you can’t complete it yourself.
Step 4 – Property Valuation Process
The 4th step is the property valuation process.
Upon receipt of your application, your chosen provider will appoint a qualified surveyor to come out and conduct a valuation on your home.
The purpose of this process is to establish the following:
- Your property’s current market value.
- The sales statistics within your neighbourhood during the previous few months and what prices similar properties have realised when sold.
- The current condition of your property and its saleability.
As a general rule, you as the applicant will be responsible for the valuation costs; however, some providers offer free valuations.
Step 5 – Accepting the Offer, Settling & Going Ahead With Your Plan
Next up are accepting the offer made to you, settling, and then going ahead with your plan.
Your financial adviser and your appointed solicitor will be sent a copy of the formal offer from your chosen provider.
It generally takes 48 hours from receipt of the valuation report by the provider for it to issue a formal offer.
Once your solicitor receives their copy of the offer document, they’ll call you to set up a face-to-face consultation.
Step 6 – Your Solicitor
Your solicitor1 will meet with you and make sure that you understand all the legalities of the contract you’ll be signing.
They’ll make copies of your formal identification and witness your signature of the acceptance of your mortgage offer.
It’s a legal requirement that they assist you with this part of the process.
They’ll then start the conveyancing process, which includes sending an original pack of signed documents to your provider’s solicitors along with a request for a completion date.
This process takes around a week from you signing the offer.
Bear in mind:
If your title is complicated, this process might take up to 4 weeks.
Step 7 – Concluding the Process
The process won’t be concluded, and you’ll be paid your tax-free lump sum!
When your plan provider’s solicitor is pleased with all of your solicitor’s legal processes, they’ll establish a completion date.
At that point, the legal costs will be paid from the lender to your solicitor, and they’ll deduct any advising and legal expenses from the equity release profits.
The remaining amount will be deposited into your account to use as you see fit.
What Can Slow Down My Equity Release Application?
Your equity release application can be slowed down by unregistered real estate or a deceased owner being mentioned on the title deeds to your home.
Other factors include lease extensions, unreleased information, falling property values, and separation contracts that affect your property.
If the property is in trust or your title deed has any limitations, or if your credit record is under court review, your application will be slowed down.
What Can Speed Up My Equity Release Application?
You can speed up your equity release application by being flexible with your time when working with the necessary third parties.
If you’re looking to speed up your equity release application, you should discuss it with your adviser during your initial appointments with them.
It’s also advisable to choose a financial adviser who specialises in equity release; they’re seasoned pros and know how to hurry an application along.
Overcoming Pre-Application Delays in the Equity Release Process
Overcoming pre-application delays in the equity release process should start with ensuring that the solicitor you appoint is an equity release specialist.
Over £750 million in home equity has been delayed due to advisers instructing non-specialist attorneys who aren’t well informed about the process.
Here’s what homeowners need to know about the pre-application process to help them avoid any delays?
Evaluation of the Situation
An evaluation of your situation will help you to overcome pre-application delays; you should ensure you understand your circumstances.
Be realistic about how much your property is really worth and the amount you’ll be able to release.
Unrealistic expectations that aren’t addressed at this pre-application stage can cause significant delays down the line.
Determine Property Worth
Determining your property’s worth2 is critical to understanding how much equity you can release from it.
It’s essential to consult with an experienced equity release adviser who’ll be able to determine the worth of your property accurately.
How Long Does the Equity Release Application Process Take?
An equity release application typically takes between 6 and 8 weeks to complete.
Some complicated cases can take much longer.
How Does a Property Valuation Work?
A property valuation works in 2 ways:
- A physical valuation is done, where a surveyor will visit your property and conduct an external and internal assessment.
- A desktop valuation that doesn’t require a surveyor to visit your property.
What's the Legal Process of Equity Release?
The FCA3 regulates the legal process of equity release. It states that you must have independent legal advice.
Legal advisers verify your identity as per money laundering requirements.
They also complete your credit, and title deed checks.
What's Involved Between the Start and Completion Date?
Between the start and completion dates, you’ll choose a financial adviser and an equity release provider and plan.
Your application will then be prepared, and your property valuation will follow.
You’ll then accept your formal offer and meet your solicitors to finalise your agreement.
A completion date will be set, and you will then be paid out!
How Difficult Is It to Release Equity?
How easy or difficult you find it to release the equity in your home will depend on several factors lenders use to assess whether you qualify for the products.
Factors to consider are your age, your income, how much money you wish to release, and the value and condition of your home.
The equity release process is relatively complex and takes a fair amount of time and preparation.
If you decide to apply for equity release, you must discuss your expectations on timelines and amounts with your financial adviser upfront.
By knowing what to expect, you can ensure that any items that can slow down your process are taken care of before you apply.
How Much Can You Release?
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Editorial Note: This content has been independently collected by the EveryInvestor advisor team and is offered on a non-advised basis. EveryInvestor may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.