If you are approaching retirement, or are already retired, you may be looking for ways to boost your pension pot. This is where, in some instances - equity release can help.
Designed for over-55s, equity release gives homeowners the option of accessing the wealth tied up in their property, without the need to downsize or move home. Lifetime mortgages are the most popular equity release plan and typically take 4 to 6 weeks to complete.
Here we give a rough outline of what the application process looks like, how equity release works, and what is required.
To find out what you can expect from the equity release process, we recommend firstly having a free initial consultation with one of our trusted and impartial advisers. It’s also a good idea to involve your children and/or family at this stage because if you do take out equity release, it will affect the inheritance you eventually leave for them.
As independent advisers, we can advise on equity release plans from across the whole market. In turn, we will produce a personalised suitability report based on your circumstances, financial goals and aspirations, which will detail the plan we recommend for you.
It’s important to note, however, that your adviser won’t be able to give you any independent legal advice, and you will need to speak to a solicitor on a separate occasion during the application process (more on this later).
Being independent, Equity Release Supermarket advisers can provide recommendations on all four types of later life lending products including the most popular – Lifetime Mortgages, but also Home Reversion plans, Retirement Mortgages and the newer Retirement Interest-Only Mortgages (also known as RIOs).
It’s at this stage that your adviser will complete your mortgage application form and gather any supporting documentation. Upon receipt our New Business Team will then forward your file onto the chosen equity release lender and from here your client portal is created and case tracking updates commence (see later).
Some equity release brokers charge upfront fees during this part of the process, so it’s worth making sure you’re clear on your financial obligations beforehand. You can take peace of mind that there are no upfront fees with Equity Release Supermarket, and we only charge an advice fee after your case has completed. This is guaranteed never to be more than £995, no matter how much equity you release.
You can find out more about this on our fees and charges page.
At any stage of the application process, our online portal – which is the first digital dashboard in the industry - allows you to easily view and track your ongoing plan progress. It also saves all your important documentation in one easy-to-manage place. You can find out about all the benefits of using our exclusive online dashboard in this helpful video.
When the lender receives your application form, they will instruct a local independent surveyor to assess your property. The surveyor’s role will be to assess the local area and conduct a market appraisal. They will also advise on the property’s current value and condition, making note of whether any essential repairs are needed or if there are any material defects.
The outcome of this report will determine how much equity you can release.
Once your application has been submitted to your lender, you will need to speak to a solicitor.
This is because the Equity Release Council’s Code of Conduct states all applicants must have at least one face-to-face meeting with an independent solicitor before taking out an equity release plan. This acts as an extra safeguard to ensure you fully understand the implications of releasing equity from your home, without undue influence from an adviser.
Unless you specifically request to use your own family solicitor, we would always recommend an equity release solicitor from ERSA (Equity Release Solicitors Alliance). Moreover, all our recommended solicitors will provide a ‘no completion, no fee’ agreement with our clients, which should be considered for any future lifetime mortgage application.
Your solicitor plays an important role in the equity release process. As well as checking your identity and filling out an initial questionnaire about you and your property, they will also check (among other things) your title.
It’s important to note, however, that your solicitor is not there to offer you financial advice – this is what your equity release adviser is for.
Here you can find out more about what solicitors do and why they're essential.
Once the lender deems the surveyor’s valuation report satisfactory, you will receive an equity release offer. This will include information about the rates, charges, amount borrowed and the terms and conditions of the plan.
If you choose to accept the offer, the paperwork will be sent to your solicitor and your signature will be required during a face-to-face meeting.
If you choose to accept the offer from your lender, their solicitors will complete the final checks of the legal paperwork and they will set a completion date. Your funds are then sent to your solicitor with any charges deducted. You will then receive the net amount either to your nominated bank account or via cheque.
If you’ve opted for a drawdown cash facility, you will have agreed on an initial lump sum to borrow with the lender and then you will have a cash reserve facility for you to borrow against in the future – if you want to. For more details on what to expect from a drawdown lifetime mortgage, take a look at our lifetime mortgage plans page.
To find out more about releasing equity, watch our simple video about the equity release process:
Alternatively, you can contact the Equity Release Supermarket team on Freephone 0800 802 1051, or email [email protected], to get in touch with your local Equity Release Supermarket adviser.