Have you been struggling to meet your lifestyle needs, or you need some extra finances to cater to your lifelong dreams? Are you a UK resident, over 55 years, and own a homeowner worth more than £70,000?
If yes, rush over to your financial adviser and start making plans towards taking out an equity release plan. Equity release allows homeowners to achieve their future financial desires by allowing them to unlock the equity tied up in their property.
It’s a secure way to release money that you’ll pay when you die or move into residential care. Its process is also straightforward and easy to understand. That said, here’s a comprehensive guide on the equity release application process.
How to Make the Most Out of Your Estate’s Value
When taking out an equity release plan, you have to go through a rigorous process. The process gives you the chance to think about the scheme and whether it’s the perfect option for you. On average, when you choose a skilled solicitor who’s knowledgeable, the process can be effortless and straightforward. you don’t know how long does the equity release process takes?
Here are some of the steps involved with the equity release application process:
Step One: Choosing Your Financial Adviser
Like every other financial product, you need to choose your adviser1 carefully. You shouldn’t conduct this vital decision over the phone, thus giving sensitive information to a stranger.
Instead, make sure that you select a local firm with a national reach and that the adviser can easily visit you in the comfort of your own home when the time’s right. Consultations with a financial adviser are free of charge and come with no obligations on your part.
Step Two: Choosing an Equity Release Plan
When you decide on taking an equity release scheme,2 after you’ve considered an alternative and fact-checked every aspect of the scheme, your adviser will recommend a plan that’ll suit your individual needs.
They’ll also provide you with documentation emphasizing all associated benefits and risks as well as any fees and expenses affiliated with the plan.
Step Three: Equity Release Application Process
The financial adviser will make the application on your behalf to your preferred plan provider. The FCA3 regulations state that you can’t do it yourself since it’s strictly an advised process.
Step Four: Property Valuation Process
When your plan provider receives the application, he/she will trigger a valuation process to find out the actual value of your home. The valuation is an essential and integral part of the application process. The lender caters to the valuation process, and it’s mostly carried out within a week of your application.
Step Five: An Effective Valuation Process
When the chartered surveyor carries out the valuation process, your lender will see to it that any amendments to paperwork are complete. For instance, the equity release company can decide to provide you with a revised illustration, thus forming the basis of the offer, assuming that your estate conforms to the plan provider’s lending criteria.
Step Six: Accepting the Offer, Settling and Going Ahead with Your Plan
Once you’re given the offer, typically two weeks after the valuation, your adviser and your preferred solicitor will receive a copy. Only then will the solicitor contact you to schedule a face-to-face meeting. FCA rules and guidelines state that you must consult a qualified solicitor and not a paralegal.
Step Seven: Instructing Your Solicitor
When the solicitor goes through the required legal and regulatory procedures with you, they’ll start the conveyancing process in conjunction with the plan provider’s chosen solicitor.4 The process can take up to four weeks, depending on the complexity of your title.
Step Eight: Concluding the Process
When your plan provider’s solicitor is satisfied with all the legal processes carried out by your solicitor, they’ll set a completion date – meaning that the legal fees will be transferred from the lender to your solicitor.
The solicitor will then settle any advice and legal fees directly from the equity release proceeds and the balance transferred into your account. If you have other secured home equity loan process, you must pay them first, and any charges on your estate removed.
Equity release schemes are an excellent way to turn the equity tied up in your home into something tangible and usable. However, like any other mortgages,5 it has its risks; therefore, before you decide to release equity from your house, ensure that you speak to your solicitor and financial adviser and see if it’s your most ideal option.
Use our Home Equity Calculator
Read this article Costs of Equity Release
Equity release can be an incredible financial plan. However, you should understand that it’ll reduce the amount of inheritance you want to leave your family. In such a case, you have to consider getting an option that allows you to ring-fence some value of your property and also offers you the ‘negative guarantee.’
Equity release plans are different from other traditional mortgages since you don’t have to make any monthly repayments.
Learn More: Is It A Good Idea?
The drawdown lifetime mortgage option is the most popular equity release plan. It offers you a flexible cash reserve facility that provides you with easy access to your funds.
It helps in eliminating the need to leave your unused funs in the banks and, instead, allows you to leave surplus cash funds with the plan provider. Therefore, you aren’t charged interest on the finances left with the provider, only the amount you withdraw.
Learn More: Drawdown Lifetime Mortgages
Equity release schemes offer you a way to retain the ownership of your home while also unlocking the equity that’s tied up in your estate. The ‘catch’ with these plans is that you don’t make any monthly repayments. Instead, you repay the equity release lender when you pass away or move out permanently.
Learn More: Equity Release Process
Your application takes about four to six weeks for the lifetime mortgage option. In comparison, it takes about six to eight weeks for the homer reversion plan – assuming that your estate’s title is clear.
Learn More: Equity Release Process
As equity release deals with your most valuable asset– your property, you must seek expert legal advice.
With legal advice you can get help through all stages of the equity release. A solicitor will advise you as to the technicalities of the scheme and ensure you comprehend the repercussions this will have during its operation.