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How long does the equity release process take?

Updated 03 September 2020

3min read

Nick Green
Financial Journalist

Timeline of equity release - step by step

The equity release process will typically take about eight weeks from start to finish, though it may be longer or shorter depending on your circumstances. The good news is that releasing equity from your home is a more seamless, less time-consuming business than it once was. So just what is involved between the start and completion date?

The timescale of the different types of equity release

The equity release application process depends on the type of equity release product you choose, and there are two types to consider: the lifetime mortgage and home reversion. Their timescales are slightly different:

  • A lifetime mortgage may or may not involve making regular payments – this is up to you and the type of product you choose. Interest is added monthly or annually and the loan is paid when you die or move into long-term care. The application process for a lifetime mortgage usually lasts between four to six weeks.
     
  • The alternative equity release plan is called home reversion. This means the provider buys all or a share of your property in return for regular income or a lump sum. You have the right to live in the property rent-free until you die or move into long-term care. At this point, the provider will receive their share of your home’s value, based on the agreement you made. As long as the title on your house is clear, applying for home reversion takes around six to eight weeks.

How to apply for equity release: a step-by-step guide

1. Take financial advice

Speak to an independent mortgage broker or financial adviser who specialises in equity release. Your adviser will continue to be vital to your application throughout, so consult them at every stage.

Your adviser will consider all your circumstances, such as your age, lifestyle, family situation, general health and other sources of income. This will help them give an unbiased professional view on whether equity release is the best option for you, how much to release if so, and choose the right product for you. They will also be on hand to answer any questions or concerns you may have.

2. Submit your application

Your application process must be completed with your adviser (whether this is a mortgage broker or independent financial adviser). You’ll also need a solicitor, as this is a property transaction. At the application stage, you’ll probably need to pay a valuation fee to your chosen lender, but your adviser will help you steer clear of any unnecessary upfront fees. Once your application is complete, it can be submitted to your equity release provider, who will conduct credit ID and title checks before contacting a surveyor.

3. Get a valuation

When the lender has received your application, they will ask a local surveyor to do a basic valuation on your home. This is simply to establish a current market value, with a reasonably quick sale in mind. They will find out how much similar properties nearby have sold for in the last few months and see if your property needs any work that could affect its value and saleability. In most cases you will foot the bill for this valuation, but it isn’t a huge amount – and equity release providers do sometimes offer free valuations.

4. Find the right solicitor

You should choose a solicitor who has experience of the equity release process. To save time, it’s best to line one up when you submit your application, so there’s no delay in getting the legal process started. A good starting point is the Equity Release Solicitors Alliance (ERSA). Some offer a ‘no completion no fee’ agreement, which is always good to have just in case. The legal costs are usually in the region of £500-£600.

5. Completion and receiving your money

When the legal checks are done and a valuation is successfully completed, your solicitor will set a completion date. This is the date when the lender will release the arranged funds, which will either be paid into your chosen bank account, or as a cheque. Receiving a cheque will save you around £30 in transfer funds. The other fees that you owe include your legal costs, payable to your solicitor, and either a percentage of your loan amount or a flat fixed fee to the broker who has arranged your equity release scheme. These are normally deducted from the amount you have borrowed.

With a bit of careful research and good legal support, arranging equity release that suits your life and plans shouldn’t be a drawn-out process. Provided there are no hiccups, it should be no more than eight weeks from start to finish.

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About the author
Nick Green is a financial journalist writing for Unbiased.co.uk, the site that has helped over 10 million people find financial, business and legal advice. Nick has been writing professionally on money and business topics for over 15 years, and has previously written for leading accountancy firms PKF and BDO.