Can I Sell My House if I Have Equity Release?

Discover How to Sell Your House With Equity Release
Do You Have Equity Release & Want to Sell Your House? Find Out The Steps, Pitfalls & Options to Sell Your House With an Existing Equity Release Plan. Keep Reading…
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Can I Sell My House if I Have Equity Release

A few years ago, you decided to release some of the equity in your home to go on a once-in-a-lifetime dream holiday with your kids and grandkids. 

The holiday was a resounding success, but now you’re wondering whether equity release was the right move.

Will equity release impede you from moving to your dream home? 

With over 500,000 people taking out equity release plans in the past 20 years, we can assure you that someone has been in the same position as you.

Read on to find out:

  • How to sell your home with equity release.
  • What does porting your plan mean?
  • What happens to your equity release when you move?

We know that there are often more questions than answers with equity release.

That’s why our experts have combed through the mountains of equity information to find you the answers you’re looking for.

We aim to provide you with straightforward, easy-to-understand facts to help you with the decisions that come with releasing equity.

Including whether you can sell your house or not.

Here’s what we’ve found. 

Before You Start Reading….

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Why You Might Sell Your Home With Equity Release

You might decide to sell your home while you have an equity release plan to move to your dream home or a smaller home.

Life can be unpredictable, and even the best-laid plans can change, especially when we’re talking about the plans that affect the rest of your life.  

Some of the reasons you might want to move include:

  • Moving to your dream home.
  • Moving to a different part of the country. 
  • Wanting to be closer to family. 
  • Down-scaling to a smaller, more manageable home.
  • Moving to a more accessible home.
  • Moving to better climates. 
  • Moving into a care facility or a retirement home.

Whatever your reason for moving, you may be wondering what happens to the equity release plan you took out years ago. 

The good news is that you have options! 

How Selling a Home With Equity Release Works

Selling your home with equity release works by contacting your provider to ascertain whether you can move your equity release plan over to your new property. 

Providers who hold a membership with the Equity Release Council1 should allow you to move to a property they deem a suitable alternative. 

Their approval involves running an assessment on the new property in much the same way they would have done with your original home. 

If they’re satisfied, they’ll simply transfer your equity release plan to the new property – this process is called ‘porting’. 

If your new property’s worth less than your original property, the lender may ask you to repay part of your loan from the proceeds of your sale. 

An important point is that not all types of property will be regarded as ‘suitable alternatives’. 

Here are some properties that lenders are unlikely to accept:

  • Studio apartments.
  • Guesthouses or bed & breakfasts.
  • Houseboats.
  • Farms.
  • Basement flats.
  • Mobile homes.

Who Can Port My Equity Release Plan For Me?

Your equity release provider will be able to port your plan for you, but before doing so, it would be wise to seek advice from a qualified equity release advisor. 

Although this isn’t always a requirement, it works to your advantage.

You can discuss whether your new property will be deemed acceptable and whether porting your plan is the right move. 

Is There an Alternative to Porting My Equity Release Plan?

Yes, the alternative to porting your existing equity release plan is to take out a new one

You would pay off your existing mortgage with the proceeds from the sale of your home and apply for a new equity release plan against the value of your new home. 

The downside of opting for a new plan is that you may be liable for early repayment fees2 on your existing plan. 

The upside, however, is that you will likely have more competitive plans to choose from, and you might even qualify for a more favourable interest rate. 

What Type of Equity Release Plan Should I Look For?

You should look for equity release plans that offer flexibility and features such as interest repayment options, drawdown facilities, and downsizing3 protection. 

For the sake of this article, let’s look at the latter in more detail. 

The downsizing protection feature allows you to repay your equity release plan in full should you decide to move to a property that doesn’t meet the lender’s criteria. 

The protection voids any repayment penalties or charges typically applied by lenders and usually only becomes available after the first 5 years of your plan.

Common Questions

What Happens to My Equity Release if I Sell My House?

Why Wouldn’t I Be Able to Transfer My Equity Release to a New Property?

Should I Transfer My Equity Release to Another Property?

How Do I Transfer My Equity Release to Another Property?

What Happens to My Equity Release if I Don’t Transfer It to Another Property?

Do I Still Own my Home With Equity Release?

Can I Move House After Equity Release?

What Are the Rules on Equity Release?

Conclusion

If you’re still questioning if equity release is a sensible decision in 2022 after considering these facts, The short answer is yes.

If done correctly, equity release may be a fantastic financial strategy to provide UK citizens over 55 with a stress-free retirement.

However, you’re obligated to get confirmation from a financial advisor before unlocking the wealth in your property.

How Much Can You Release?

Use the FREE Calculator Below 👇

 

Equity Release Calculator

Value of Your Home?

50000

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🔒 100% Secure & Fast

It’s VERY FAST, takes just 8 seconds

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.