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Equity Release Application Process

How Long Does Equity Release Take?

By Mark Gregory on the 10th August 2020

Equity release usually takes from between just 4-6 weeks, though at Equity Release Supermarket, we have cases where the whole process has been completed in just 18 days!

Timescales are dependent upon a number of factors, such as your property type, the lender involved and the efficiency of your solicitor.

Your adviser and case management team at Equity Release Supermarket are experts in co-ordinating all the parties involved to make the process as fast and as seamless as possible.

Over recent years, timescales to take out equity release have shrunk as the industry has progressed to online case management, reducing the need for paperwork, postage and signatures on documents.

Moreover, the market has become increasingly competitive and so it has been in the lenders’ best interests to become more efficient!

Here we review the key stages involved in taking out equity release and you can also learn more about how equity release works here.

What are the timescales to take out equity release?

An equity release application usually takes between 4 to 6 weeks for a lifetime mortgage (the most popular type of equity release plan) and 6 to 8 weeks for a home reversion scheme, assuming the title on the house is clear. The actual amount of time your equity release process takes, also depends largely on how efficient and experienced your solicitor is.

Applying for equity release involves legal paper work, which needs to be handled by a solicitor, and finding solicitors with expertise in equity release can help to avoid any potential delays in your application.

What’s involved in taking out equity release?

The whole process starts with the completion of an application form which must be combined with financial advice as NO equity release provider will accept an application without it. Why not meet your local, independent Equity Release Supermarket adviser?

At this stage any fees required, which would be clearly stated in the Key Facts Illustration (KFI), will need to be paid. Normally this would include the valuation fee made payable to the lender. Some equity release brokers do charge an advice fee on application; but at Equity Release Supermarket, we only charge our advice fee upon completion, so beware of paying unnecessary upfront fees.

Does my house have to be valued?

Yes, it does. On completion of the application form, it is submitted to the equity release provider who will instruct a local surveyor to complete a basic valuation of the property. The role of this surveyor is to complete a report which will advise on the current market value based on a relatively quick sale. The surveyor’s role will be to assess the local proximity to the property and establish similar properties and the price they have sold for within the last 3-6 months. Additionally, the surveyor will ascertain whether any essential repairs will be needed should the property have material defects that could affect the long-term structure or re-saleability of the property.

How is my solicitor involved?

At the same time as the application is submitted, (for speed of completion) it is wise for the legal process to get underway. Unless a client specifically requests to use their own family solicitor, we would recommend an equity release solicitor from ERSA (Equity Release Solicitors Alliance).

We have an experienced panel of equity release specialist solicitors covering England, Scotland and Wales. They are all members of ERSA; including the two largest & most experienced firms - Equilaw and Ashfords. As part of the Equity Release Council standards, all applicants must be seen face-to-face by their solicitor as further protection.

Both these equity release specialists offer Equity Release Supermarket a specially negotiated fixed fee agreement for our clients of £695+VAT & disbursements.

Additionally, these solicitors will provide a ‘no completion, no fee’ agreement with our clients which should be considered for any future lifetime mortgage or home reversion application. There are many benefits of using our recommended panel such as speed and the quality of communication, as we have online access to their portals, providing efficiencies and enabling quicker completion timescales.

The solicitor’s role

Two sets of solicitors must be in place to carry out the whole process. Under Equity Release Council standards, different solicitors must be employed on behalf of the client and the lender. Once instructed by the client or broker, the solicitor acting on behalf of the client will send out an initial questionnaire requesting further information. This will include a request for information to understand if any mortgage currently exists, the owners to the title, any restrictions, further tenants or major improvements that have been carried out with respective planning permissions. This questionnaire also provides the permission for the prospective solicitor to act on their behalf.

What about existing mortgages or secured loans?

Should any existing charges by way of mortgages or secured loans be present on the title deeds then they must be removed prior to, or upon completion. Any mortgage will usually be settled by the proceeds from the equity release scheme at funds release stage. However, another role of the solicitor will be to establish exactly how much will be required on the proposed completion date. This will be achieved by requesting a redemption statement from the mortgagee, who will provide the current balance and the daily accrual rate of interest being added during the interim period to completion date.

What checks does the lender make?

For an application to proceed through to completion, the lender will carry out certain checks to meet money laundering and the Consumer Credit Act requirements. This will be proof of ID including passport, driving licence or government backed evidence such as your annual state pension letter or Inland Revenue tax code notification.

Should none of these be available, most lenders will also require a birth and/or marriage certificate as satisfactory proof of who you are. Additionally, proof of address will be required, so a recent utility bill or bank statement will be necessary.

Some lenders will also carry out credit checks. You may ask why this would be necessary as NO monthly payments are usually required with a lifetime mortgage. The lenders’ view is that if someone has been negligent with previous credit payments, then there may be a tendency to not look after their property, thus affecting the lenders’ security.

Nevertheless, there would have to be severe credit problems for a lender to decline an equity release application due to adverse credit. Most lenders will accept previously missed payments, defaults and even CCJ’s (County Court Judgements) on their credit file, unless they are significantly large.

Even then, most lenders will accept the application as long as the applicant has been forthcoming with an explanation as to why the CCJ’s had been applied. That said, undischarged bankrupts would usually be unsuccessful with any equity release application.

Equity release and adverse credit

Some lenders will carry out credit checks. You may ask why this would be necessary as NO monthly payments are usually required with a lifetime mortgage scheme. The lenders’ view is that if someone has been negligent with previous credit payments, then there may be a tendency to not look after their property, thus affecting the lenders’ security.

Nevertheless, there would have to be severe credit problems for a lender to decline an equity release application due to adverse credit. Most lenders will accept previously missed payments, defaults and even CCJ’s (County Court Judgements) on their credit file, unless they are significantly large. Even then, most lenders such as Stonehaven will accept the application as long as the applicant has been forthcoming with an explanation as to why the CCJ’s had been applied. Undischarged bankrupts would usually be unsuccessful with any equity release borrowings.

What are the final stages to taking out equity release?

Upon successful valuation and title checks, the solicitor acting on behalf of the client will set the completion date. Once your equity release scheme has gone through, you can receive the money by having it paid directly into your nominated bank account, or if you wish to save the telegraphic transfer fee (approximately £30), you can receive the funds in the form of a cheque. Depending on the scheme, money can be borrowed either as a one-off capital lump sum or by taking ad hoc withdrawals from a cash reserve set up from the outset.

An equity release plan can be a great way to turn the money tied up within your property into something tangible and usable. But like any large loan, it has its own risks. Therefore, before you decide to release equity from your home, make sure you speak to your solicitor or independent financial adviser first.

At Equity Release Supermarket, our service is award winning and we’re rightly proud of the compliments we receive from our customer reviews in feefo, the leading independent review platform.

To help you track the progress of your application, we also provide our customers with a free to use online case tracking facility, which is exclusive to Equity Release Supermarket, and gives you immediate access to your secure dashboard where your documentation and case updates are stored.

If you have any questions about the equity release process, please call our freephone 0800 802 1051 and one of our expert and independent equity release advisers will be happy to help.


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