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How does equity release work?

Compare Equity Release

Checked for accuracy and updated on 27 June 2023

Equity release allows homeowners over the age of 55 to unlock the value of their property without the need to sell or downsize.

In principle, equity release schemes come in two formats:

Lifetime mortgages are a type of mortgage secured on your property which can be your main residence, second home or even a holiday home.

Homeowners continue to own their home and can choose either a single cash lump sum, income or take smaller chunks of money over time – known as drawdown. All the money released is tax-free and the homeowners get to stay in their property until they die or go into long-term care.

The money raised from any equity release scheme can be used for any legal purpose: from home improvements to clearing existing debts or mortgages.

And if it’s just some extra funds needed to buy a new car or a once-in-a-lifetime trip, that’s fine too – we never tell you what to do with your money.

Or

Home reversion plans allow you sell a percentage of the value of your property in return for a tax-free cash lump sum, or series of capital amounts. The home reversion provider offers a lifetime tenancy to the homeowners, enabling them to live rent free in their home for the rest of their lives.

Although home reversion has a minor role in today's equity release market, they still provide peace of mind as a way of releasing tax-free cash AND guaranteeing an inheritance for your beneficiaries.

What’s the equity release application process?

At Equity Release Supermarket, we provide a transparent and customised service which sees our experienced and friendly advisers guide you through the whole application process. From initial research to the successful release of funds at completion, you can rely on our team to explain everything in a language that’s easy to understand.

Here is a guide to explain the equity release application process:

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1 Advice and recommendation

The first part in the equity release process is to have a free initial consultation with one of our advisers. They will provide you with a personalised suitability report based on your circumstances and products currently available in the market.

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2 Application

Following acceptance of our recommendation, your equity release adviser will complete an application form, collecting supporting documentation and identification. Our new business team will then forward your file onto the equity release provider.

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3 Valuation report

Upon receipt of your application, the lender will instruct a local independent surveyor to contact you and arrange a mutually convenient valuation of your property. The surveyor will conduct a market appraisal, advising its current value and condition for security purposes. The outcome of this report will determine how much equity can be released.

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4 Conveyancing and legal

Your appointed equity release solicitor will be responsible for dealing with the legal process. They will liaise with the lenders’ solicitor and fill out an initial questionnaire about you and your property. You will then receive an offer from the lender, along with a Solicitor's Certificate.

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5 Offer made

Once the lender deems the surveyor’s valuation report satisfactory, you will be sent an equity release offer. This confirms the terms and conditions of the mortgage, including the rate, charges and amount borrowed. The original offer is sent to your solicitor, requiring a signature in the presence of your solicitor during a face-to-face meeting.

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6 Completion

Finally, when the lender’s solicitors have completed their final checks of all the legal paperwork, they will set a completion date. The funds released are sent to your solicitor initially with any charges deducted. Dependent upon your preferences, the net amount will then be forwarded to your nominated bank account or posted via cheque.

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7 Enjoy the proceeds!

With the funds released, you are now free to spend the equity release proceeds in whatever way you wish. Equity Release Supermarket prides itself on service, so we will always try to check-in on an annual basis to make sure the plan remains competitive.

What our happy customers have to say about our equity release advisers

Daniel was really informative and didn’t put any pressure on us to make a decision

Mr & Mrs S - Sheffield, South Yorkshire

The process was made very easy and went through so quickly. We were very impressed as any worries we had, were quickly covered. ... READ MORE

Mr W - Broxburn, West Lothian

Excellent from beginning to completion. Andrew explained everything very clearly. Being able to initially do my own research... READ MORE

Mrs M - Exeter, Devon

Superb advice right from the start. Our wishes & concerns were taken fully into account when selecting the best product.... READ MORE

Mr & Mrs P - Fareham, Hampshire

Anna was empathetic to our requirements and her advice and recommendations helped to clarify our decision.

Mr C - Rochdale

Full & comprehensive information provided together with close contact throughout the process. Very prompt turnaround following... READ MORE

Mr & Mrs T - Carnforth, Lancashire

Adam is very knowledgeable on the matter we raised, and his explanations were very clear and easy to understand.

Mr & Mrs G - London

We knew nothing about Equity Release at the start, but after contacting Liam, he explained everything and guided us through... READ MORE

Mr & Mrs P - Newport

The whole process was easy to understand throughout and the time from application to receiving our funds was very quick with... READ MORE

Mrs C - York

‘In these uncertain times, John's support and extensive knowledge have been outstanding. My husband and I have previously... READ MORE

Mr & Mrs J - Cardiff, Wales

Mark,Thank you so much for arranging the Just Retirement Lifetime Mortgage for me. When you see yourself running out of... READ MORE

Mr M - Worthing, Sussex

Simply fabulous service. I would say that the help and advice I got from Claire was superb. Every effort was made to ensure... READ MORE

Mrs B - Fareham, Hampshire

A smooth episode all-round, which could have been so much more fraught, being a quite complex operation.

Mr & Mrs G - Lowestoft, Suffolk

I want to say thanks for the excellent service I received, Jo gave me help and advice with a smile.

Mrs F - Camberley, Surrey

A huge thank you to Paul and Collete for their hard work, patience, and regular contact during the process of obtaining equity... READ MORE

Mr & Mrs S - Hull

Hannah Boxshall was professional and informative, answering all of my questions and provided an excellent service. I liked... READ MORE

Mr P - London

Compared to Age Partnership who we spoke to first re equity release, Simon's advice turned out much better. I feel Simon... READ MORE

Mr H - Stafford, West Midlands

Excellent, professional service, everything was done in a timely manner. calls happened when promised.

Ms B - Forest of Dean

Great help and friendly service which puts you at ease! Thank you so much.

Miss H - Sutton Coldfield, West Midlands

Sara has recently helped us with an equity release on my mum’s property. Not only was she professional & thorough, but... READ MORE

Mrs K - Brentwood, Essex

Gary was very persistent and helped us get the best rate where others had failed. The case had a few obstacles and the service... READ MORE

Mr and Mrs M - Kings Lynn

We were very pleased with the professional and friendly approach from Allen and all the people involved in getting us on... READ MORE

Mr & Mrs S - Southampton

Equity release gets bad press, but the flexible loan is perfect for me. I feel very secure & very pleased it is still my... READ MORE

Mrs S - Kidderminster, Worcestershire

The adviser I dealt with was polite and friendly, easy to contact and kept me informed as things progressed.

Mr P - Polegate, East Sussex

How long does the equity release application process take?

A lifetime mortgage scheme usually takes somewhere between 4 to 6 weeks to complete, while a home reversion plan is more like 8 to 10 weeks, assuming the title on the house is clear. How long this takes will also depend largely on how efficient and experienced your solicitor is.

Applying for equity release involves legal work, which should be handled by a solicitor with expertise in equity release. This can help to avoid any potential delays in your application.

Equity Release Supermarket can provide a panel of qualified equity release solicitors to choose from, who can handle your application. All these solicitors offer a home visit if required and a competitive pricing structure, backed up by a 'no completion, no fee' guarantee.

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