Equity Release Criteria in 2022

What Are the Criteria for Equity Release You Must Know?
Contributors: Nicola Date, Katherine Read. Edited by Rachel Wait & Reviewed by Francis Hui
Are You Thinking About Releasing Equity from Your Home? Find Out If You Are Eligible & What the Maximum Amount of Cash Is That You Can Release. Keep Reading to Learn More…

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Don’t spend your hard-earned cash only to discover that you don’t fit the equity release criteria!

First take a look a look at these 6 important criteria.

Our expert team has looked into more than 220 equity release plans, researched all the regulated plan providers, and uncovered the frequently asked equity release questions regarding eligibility.

Let’s find out now!

What’s Equity Release?

Equity release is an umbrella term for a group of retirement mortgages designed for older borrowers.

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

What is the Basic Equity Release Criteria?

The basic equity release qualification criteria are that the youngest homeowner must be aged 55 or older.

Your property must be located in the UK or surrounding islands, and you must own your home outright or only have a small lease left.

If I Qualify for Equity Release, Will I Qualify for All Plans?

If you qualify for equity release, you may not qualify for all plans.

Some plans and lenders only service parts of the UK and certain home reversion schemes have an age minimum of 60 or 65 years.

How Do I Discover if I Qualify for Equity Release?

You will discover if you qualify for an equity release by contacting a financial adviser that specialises in equity release.

Will help you determine if these plans could be the right step for you and your loved ones.

6 IMPORTANT Equity Release Criteria Questions in 2022

Here are 6 important equity release criteria questions to help you determine if you qualify for equity release in 2022.

As a UK homeowner over the age of 55, you’ll likely qualify for equity release. However, there is some additional criteria that might be relevant to you.

Check these out!

1. Is There a Minimum & Maximum Loan Amount?

There is a minimum and maximum loan amount with equity release. The minimum is usually £10 000.

The maximum loan amount will depend on the value of your property and your age.

Some lenders will cap this amount, but others will refer your case to another lender, should you wish to exceed their cap.

Furthermore, the amount you can release will depend on the type of equity release plan you select.

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

2. Do You Have to Have a Good Credit Score to Get Equity Release?

No, you generally don’t 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 plan.

Therefore, your past income and expenditure are not heavily scrutinised by lenders, so it might be possible to get equity release with bad credit.

However, some will request you pay any outstanding IVAs or County Court Judgments, using a portion of the equity you release.  

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

You can’t get equity release on all property types. However, most standard construction properties including houses, flats, and bungalows should qualify.

Some lenders may consider additional criteria.

Like a 100% flat roof, those with some commercial activity, certain spray foam insulation, and properties with an annex.

On the other hand, Lenders may decline concrete, timber-framed, and metal-framed properties, depending on the type and age of construction.

4. Can You Release Equity From a Leasehold Property?

Yes, it’s possible to get equity release on a leasehold property.

The lender will need to take into account how much time you have left on the lease, any ground rent and service fees, and any sell-on restrictions.

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

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

Yes, you can get release equity from an ex-local authority property.

However, lenders will take into account the proportion of homes in the region that are still controlled by local authorities.

If your home is leasehold and the freeholder is the council, you may be forced to buy the freehold to obtain equity release.

6. Does the Location of Your Property Matter With Equity Release?

Yes, the location of your property matters with equity release.

You can access most plans if you live in mainland England, Wales, or Scotland. However, currently, only 2 lenders provide equity release in Northern Ireland.

Common Questions

In Conclusion

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

The equity release market is growing which means we’re likely to see further flexibility when it comes to these criteria.

If so, be sure to understand all the equity release pitfalls in 2022 and look at the equity release mortgage alternatives before making your final decision.

In addition, you must get in touch with an independent financial adviser to start your equity release journey.

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

Before You Go…

Use the FREE Calculator Below 👇

 

Equity Release Calculator

Value of Your Home?

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