Updated 24 March 2022
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?
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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:
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.
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.
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.
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.
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.