What's the Equity Release Process in Jan 2022?

Find Out How the Equity Release Application Process Works in the UK & How Long It Takes

Contributors: Nicola Date, Katherine Read. Edited by Rachel Wait & Reviewed by Francis Hui

The Equity Release Loan Process Has Never Been Simpler. We Provide a Step-By-Step Guide to Releasing Equity in Your Home and How the Application Process Works.

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8 Step Equity Release Process

Don’t waste your time with the wrong advice. Releasing equity from your home in Jan 2022 is easier than you think!

Did you know that every 12 seconds, retirees across the country make the life-changing decision of unlocking the cash tied into their homes? You could be sitting on a goldmine and not even know it!

While equity release might seem overwhelming, we’re here to help you:

  • Learn the 8 simple steps to unlocking cash through equity release in Jan 2022.
  • Discover how long the equity release process takes.
  • Decide if equity release is suitable for you and your family.

We’ve compiled this simple, step-by-step guide by researching over 220 plans from more than 28 providers and thoroughly studying the rules and requirements set out by the Equity Release Council.

Could you be the next homeowner to make your retirement dreams come true? Find out now!

What’s Equity Release?

Before you read on, we’ve summed up what you need to know about equity release in this quick video. Check it out!

Learn More: How Does Equity Release Work on a Property?

What is the Equity Release Application Process?

To apply for equity release, the homeowner must first get in touch with a financial adviser. From there, the adviser will talk you through your options and help you find the best equity release plan for you and your family. If you’re set on a particular lender, you can contact them directly as most lenders have an in-house advisory team. However, we recommend a whole-market financial adviser to find the best possible deal.

How Long Does It Take to Release Equity From Your Home in Jan 2022?

The length of the equity release process is, on average, anywhere from 6 to 8 weeks, depending on the plan you select and the complication of your case. The minimum time it can take is 4 weeks, and the maximum is generally 12 weeks.

Equity Release Process

The 8 Step Equity Release Process in Jan 2022

Taking out an equity release plan in the 21st Century is a reasonably easy, stress-free process. You will work closely with a financial adviser to unlock the cash tied up into your home.

Here are the 8 simple steps to unlocking your retirement dreams in Jan 2022:

Choosing Your Financial Advisor

Step 1 – Choosing Your Financial Adviser

When releasing equity from your home, you must do so under the guidance of an independent financial adviser. It would be wise to select someone in your area who specialises in equity release.

Note that your adviser will be an integral part of your equity release journey, consulted at each step of the process, so it’s best to work with someone you trust.

Your financial adviser will review all your circumstances, including:

  • Your age, and the age of your spouse if you have one.
  • Your lifestyle.
  • Your family situation.
  • The general health of you and your spouse.
  • Other sources of income that you might have.

Their understanding of this information will help provide the unbiased professional view you need to have.

They will help you to work out if equity release is the correct option for you, and if so, how much cash you should release, and which product is right for you.

They will also be available to answer all your questions and concerns.

Choosing an Equity Release Plan

Step 2 – Choosing an Equity Release Provider & Plan

When you decide to take out an equity release scheme, your adviser will recommend a plan that’ll suit your individual needs after you’ve considered all the alternatives.

They’ll also provide you with documentation emphasising all associated benefits and risks as well as any fees and expenses affiliated with the plan. That way, you’ll be able to get the best plan with their help.

You will have 2 main types of equity release plans to consider:

Lifetime Mortgage

The first type of equity release is a lifetime mortgage. This option lets you take out a mortgage on your home if it’s your primary residence. However, you will remain the owner. You’ll have the option to ringfence part of your property for your family to inherit.

You can also make repayments or let the interest roll up. Better yet, any loan amount and accrued interest will be paid back when you pass away or need long-term medical care.

Learn more about: How Does a Lifetime Mortgage Work?

Home Reversion

The second type is a home reversion plan, which means you sell some or all of your property. You can sell it to someone like a home reversion provider, and they’ll pay you a lump sum for it, but they can also pay you in regular payments. It’s your choice.

Find out more about: What are Home Reversion Schemes?

In addition, there are several equity release firms to consider. Your financial adviser will help you find one that’s best for you. Be sure to have a look at all the terms and conditions of the plan.

Choosing an Equity Release Plan

Step 3 – Preparing Your Application

Now that you have selected the right plan for you, your financial adviser will assist you in completing your application. They will then submit it to your plan provider. Financial Conduct Authority (FCA) regulations state that you can’t do it yourself since it’s strictly an advised process.

The plan provider will then conduct a credit ID and title check before contacting a surveyor.

You might want to check out: What are the Criteria for Equity Release?

Property Valuation Process

Step 4 – Property Valuation Process

When your plan provider receives the application, they will trigger a valuation process to find out the actual value of your home. The valuation is an essential and integral part of the process.

The lender caters to the valuation process, and it’s generally carried out within a week of your application.

Once the surveyor is contacted, they will come to do a valuation on your property. This is to establish the following:

  • The current market value of your property.
  • The sales statistics in your area in the last few months, and for how much those properties were sold.
  • The quality of your property, the maintenance standards, and whether it is sellable.  

In most cases, you will be responsible for footing the bill for this valuation, but it isn’t super costly. In some cases, equity release providers will offer free valuations. You can ask your financial adviser about this.

An Effective Valuation Process

Step 5 – An Effective Valuation Process

When the chartered surveyor carries out the valuation process, your lender will see that any amendments to the home’s paperwork are complete.

For instance, the equity release company can decide to provide you with a revised illustration, thus forming the offer’s basis, assuming that your estate conforms to the plan provider’s lending criteria.

Accepting the Offer, Settling & Going Ahead with Your Plan

Step 6 – Accepting the Offer, Settling & Going Ahead With Your Plan

Once you’re given the offer, typically 2 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.

Pro Tip: FCA rules and guidelines state that you must consult a qualified solicitor, not a paralegal.

Instructing Your Solicitor

Step 7 – 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.

Take Note: The process can take up to four weeks, depending on the complexity of your title.

Concluding the Process

Step 8 – Concluding the Process

Great news! It is finally time to receive your tax-free cash!

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 will be transferred into your account.

If you have other secured home equity loan proceeds, you must pay them first and remove any charges on your estate.

Learn more: Equity Release Costs & Fees Explained

A Quick Note on No Negative Equity Guarantee

The ‘no negative equity guarantee‘ protects you so that your family doesn’t pay more than the total sale value of your home when you pass away or move into a care facility, even if property prices plummet.

When your lifetime mortgage plan comes to an end, the lender will sell your house and settle the loan amount plus any interest rate on releasing equity. Any additional income will be given to your family.

Your family can sometimes keep the house and use other means of income to pay off your mortgage if they are financially able to do so.

The Equity Release Council has set out this law to protect the consumer.

Read more about: The Equity Release Council

Got Questions? Check These First

How Long Does Equity Release Take To Complete?

Can Equity Release Be Refused?

Can Equity Release Be Mis-Sold?

How Difficult Is It to Release Equity?

Can I Take Out Another Loan Against the Value of My House?

What Benefits Will Be Impacted if I Take an Equity Release Plan?

Can I Do Equity Release on a Buy to Let Property (BTL) Or a Second Home?

Will Doing Equity Release Affect My Entitlement to Means Tested Benefits?

In Conclusion

Equity release schemes are an excellent way to turn the equity tied up in your home into something tangible and usable.

However, like other mortgages, it has its risks. Thanks to the Equity Release Council, and the 8 steps mentioned above, you can rest assured that you’ll be protected throughout the process.

Before you decide to release equity from your house, ensure that you speak to your financial adviser, research all equity release alternative options, and see if it’s your most ideal option in Jan 2022.

Editorial Note: This content has been independently collected by the SovereignBoss advisor team and is offered on a non-advised basis. Sovereignboss may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.

rachel w

Rachel Wait
Personal Finance Journalist

Rachel is an experienced finance journalist and editor with a particular interest in personal finance and consumer affairs. She has vast experience writing about money issues, property, insurance, and consumer affairs, and you’ll find her articles regularly featured in top media and newspaper publications.
john lawson profile.jpg

Written by
John Lawson
Founder SovereignBoss

John is passionate about education and has made it his life-long mission to assist UK citizens on their future financial options, with a specialist interest in equity release, and SovereignBoss is the natural extension of this passion.

Reviewed by
Francis Hui
Senior Risk Manager

Having held various high-level roles across the industry, Francis is truly an expert in aiding UK citizens in their financial decisions and risk analysis. His unique insight and statistical knowledge make him the perfect person to help you take your financial future to the next level.
kath icon

Katherine Read
Consumer Affairs Writer

Since joining the editorial team at SovereignBoss, Katherine has become focused on bringing transparency to finances and opportunities for those approaching retirement age. She writes on the topics of equity release, home reversion, and mortgages.

Nicola Date
Writer & Journalist

Nicola is a financial writer for SovereignBoss and is passionate about the opportunities that equity release can open up for homeowners. Her extensive business experience and deep understanding of the industry means that she’s always up-to-date with the latest developments.

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