How Long Does Equity Release Take?

Do You Want to Understand the Equity Release Process?
Contributors: Nicola Date, Katherine Read. Edited by Rachel Wait & Reviewed by Francis Hui
Do You Want to Know More About the Equity Release Process? Discover How Long It Takes to Release Equity & Which of Your Benefits Will Be Impacted. Learn More Here.

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Understand the equity release process so you don’t waste your time with the wrong advice. Releasing equity from your home in 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!

What You’ll Learn in This Article:

    We’ve compiled this simple, step-by-step guide by researching over 220 plans from more than 28 providers,

    and thoroughly studying the equity release rules and requirements set out by the Equity Release Council.

    Could you be the next homeowner to make your retirement dreams come true?

    Let’s find out now!

    What’s Equity Release?

    Equity release is a financial product that allows homeowners over 55 to unlock the cash tied into their estate.

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

    Check it out!

    What is the Equity Release Application Process?

    The equity release application process involves the homeowner first getting in touch with a financial adviser.1

    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 2022?

    The length it takes to release equity from your home is anywhere from 4 to 12 weeks, depending on the plan you select and the complexity of your case.

    However, the average case takes 6 to 8 weeks.

    Throughout the process, your financial adviser will guide you and help you understand all the equity release jargon.

    The 7 Step Equity Release Process in 2022

    There are 7 steps in the equity release process and it 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 2022:

    Step 1 – Choosing Your Financial Adviser

    You’ll need to choose an independent financial adviser to help you throughout the equity release process.

    We always recommend a whole market financial adviser as they review the full industry when helping you select a plan.

    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.

    Step 2 – Choosing an Equity Release Provider & Plan

    You will then choose an equity release provider and plan, with the help of your financial adviser.

    They’ll also specify if they feel you should rather opt for an equity release alternative.

    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 plan2 with their help.

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

    Lifetime Mortgage

    A lifetime mortgage is the most primarily used equity release product. 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.

    Home Reversion

    A home reversion plan is the second post popular product which allows you to 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.

    In addition, there are several equity release firms to consider.

    Your financial adviser will help you find the one that’s best for you. Be sure to have a look at all the terms and conditions of the plan.

    Step 3 – Preparing Your Application

    Preparing your application is the next step in the equity release process.3

    Now that you have selected the right plan for you and you’ve met the equity release criteria, 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.

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    Step 4 – Property Valuation Process

    Step 4 is the 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.4

    The valuation is an essential and integral part of the process as it determines the amount of cash you can unlock from the property.

    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.

    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.

    Step 5 – Accepting the Offer, Settling & Going Ahead With Your Plan

    Next, you’ll accept the offer, settle, and move 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.

    Step 6 – Your Solicitor

    At this stage your 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.

    Step 7 – Concluding the Process

    Finally, you’ll conclude the process and receive 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.

    There are various equity release costs and fees with all these different processes.

    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 prices5 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 income6 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.

    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, understand the equity release process, research all alternative options, and see if it’s your most ideal option in 2022.

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