6 Equity Release Criteria

Equity Release Rules All Homeowners Should Know

We Compiled the Most Important Equity Release Criteria & Rules. Find Out If You Qualify in This Easy Step-By-Step Guide To Help You Understand How It Works.

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Equity Release Criteria

Don’t spend your hard-earned cash only to discover that you don’t qualify for equity release!

Every 12 seconds, a homeowner in the UK unlocks the cash tied into their home, and you could be next!

But, before you get too excited, you’ll need to know:

  • The 6 important equity release criteria.
  • The amount of equity you might be eligible to release.
  • If you can release equity with a bad credit score.

As authorities in our field, we’re here to give you FREE equity release advice. Our expert team has looked into over 220 equity release plans, researched all the regulated plan providers, and uncovered the frequently asked equity release questions regarding eligibility.

Let’s discover these right now!

What You MUST Know

Before continuing, check out this quick video of the most important information on equity release.

6 IMPORTANT Equity Release Criteria Questions

As a homeowner in the UK, who is over 55, you likely qualify for equity release. There is, however, some criteria that might be relevant for you.

Check these out!

1. Is There a Minimum & Maximum Loan Amount?

There is, in fact, a rule of the minimum amount of equity that you can release from your home. In general, this is £10 000. However, your equity release costs can be deducted from this amount.

Take note: The minimum amount can differ from one plan to another. Your financial adviser will have this information for you.

The maximum loan amount will depend on the value of your property and your age. Some lenders do cap this amount. However, others will refer your case to another lender, should you wish to exceed their cap.

The Property Criteria

2. Does One Have to Have a Good Credit Score to Get an Equity Release?

Unlike traditional mortgages, you are not obligated to make any repayments in your lifetime with an equity release. Therefore, your past income and expenditure are not heavily scrutinised for equity release.

Lenders will generally overlook a poor credit history, depending on the severity of the situation. This will, however, differ from one lender to another, according to their terms and conditions. You will never be able to release equity while you are in an undischarged bankruptcy.

Some lenders will request you pay any outstanding IVA’s or County Court Judgements, using a portion of the equity you release.  

Finally, there are a handful of lenders who may not even do a credit check. You can inquire about this with your financial adviser.

The Homeowner’s Age

3. Can You Get Equity Release on All Property Types?

The great news is that equity can be released from any standard construction property. These include:

  • Houses
  • Flats
  • Bungalows

Some lenders may also consider additional criteria, like a 100% flat roof, those with some commercial activity, certain spray foam insulation, and properties with an annexe.

Lenders may decline concrete, timber-framed and metal-framed properties for equity release. This will depend on the type and age of construction.

Equity Release Criteria & Rules You Must Know

4. Can You Release Equity From a Leasehold Property?

If the remaining lease length meets your equity release lender’s underwriting requirements, then you can release equity from the property. These criteria may differ between lenders.

In addition, you can look at extending your lease as part of the equity release process if the current length doesn’t qualify, which may incur additional charges.

the location of your home

5. Can You Release Equity From an Ex-Local Authority Property?

Yes, you can release equity on ex-local authority properties. However, the lender will consider the number of local-authority owned properties in the area.

The minimum property value accepted for a flat is £200 000 in such cases.

If the freeholder of your leasehold property is the council, the lender may require you to purchase the freehold, before you can release equity from your home. Any additional costs can come from the equity released.

Note that in these instances, the equity release process might take a little longer.

Your Credit History

6. Does the Location of Your Property Matter?

First off, your property must be located within the UK to qualify for equity release.

The individual lender will decide if they are willing to release equity from a property in your specific area.  Some lenders will only work with properties on the mainland, while others will release equity from properties on some or all islands.

Ask your financial adviser if the location of your property could be a potential issue.

Got Questions? Check These First!

Who Qualifies For Equity Release?

How old do you need to be for equity release?

Do You Have To Be 55 For Equity Release?

Can One Release Equity if They’re 54?

Can Equity Release be Refused?

How Does One Qualify for a Lifetime Mortgage Scheme?

In Conclusion

Do you think that equity release might be the perfect way to give your retirement the cash injection of your dreams?

If so, be sure to understand all the pitfalls of equity release and look at the equity release alternatives before making your final decision.

In addition, you must get in touch with an independent financial adviser to start your equity release journey and use our Online Home Equity Release Calculator to find out how much cash is tied up into your home!

Equity release can be a straightforward, stress-free process with the right guidance and a full understanding of the rules. What are you waiting for?

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