Are you interested in equity release but not completely sure about what’s involved? Our step-by-step guide helps you with the key steps involved in unlocking the wealth in your home.
Check your eligibility
Before going any further, check you are eligible to apply for equity release. You need to be at least 55 years old and a homeowner. If you are applying jointly, for example with your spouse, the youngest applicant must be at least 55. For some types of equity release, you may need to be older. The property you are thinking about releasing equity from must be your permanent, main residence.
Do your research
Before meeting with an adviser you may find it helpful to briefly research equity release. Access Equity Release has produced a number of helpful videos, which cover key terms and frequently asked questions. You can also get more information from the Equity Release Council (the industry body for equity release) or the Money Advice Service (free, impartial money guides from the government). We recommend noting anything you don’t understand, or any questions that come to mind in order to be able to discuss them with your adviser.
Find a qualified adviser
Equity release is a specialist area, which is regulated by the Financial Conduct Authority (FCA). You will need advice from a qualified and regulated adviser. Ideally, you should choose an adviser who is also a member of the Equity Release Council (ERC) as this means they must adhere to additional safeguards for customers. Access Equity Release is both FCA registered and a member of the ERC. You can find our tips on choosing the right adviser here.
Talk to your adviser
Your adviser will discuss your circumstances in detail to help you decide whether equity release is the right option for you. At Access Equity Release, we really get to know you so that we can put a plan together to suit you. We explain everything in plain English and avoid jargon. We want to make sure you are more informed about your financial situation and your options than you have ever been before. Your adviser will explain the benefits of equity release and also the other implications you need to consider. If equity release is suitable for you, then your adviser will let you know about all the available products. If your Access Equity Release adviser thinks equity release is not the best option for you, they will tell you and can suggest alternatives.
You will get a written report explaining the details of the plan which is recommended. This includes details of the costs and risks associated with it. This is known as a Key Facts Illustration (KFI) for a lifetime mortgage. If you are considering more than one option, you must be given a KFI for each plan so you can compare them.
Think about it
Take your time to make sure you understand everything in your adviser’s recommendations. If you haven’t already done so, you may want to discuss equity release with your family and show them the KFI. Any decision you make could impact on their future inheritance and you should take specialist advice on this. Consider whether there would be any implications on your eligibility for state benefits, your tax position or your options for moving home in the future.
Complete the application
If you decide to go ahead, your adviser will help you complete and submit an application form. If this is accepted by the plan provider, you will receive a formal offer which your adviser will explain to you. These documents will set out the full details of the plan including interest and early repayment charges. The equity release provider will also instruct a qualified surveyor to value your home. You should receive a copy of their report.
Take legal advice
Before signing a contract, you must consult with a solicitor. This is under the rules of the ERC. This solicitor will make sure you proceed with full knowledge of benefits and risks and will usually prepare a written report explaining the contractual obligations within your offer. The solicitor must verify that you understand the terms of the contract you are considering entering into.
Sign the contract
You will also need a solicitor to carry out all the legal work to complete your contract with the equity release provider. There are specialist solicitors who work in this area which helps to make the process run more smoothly. If you are happy to go ahead, you and your solicitor sign the acceptance form. A certificate is then issued to confirm all the key points have been discussed.
Equity is released
After some final legal checks, the money will be released to your solicitor. They will then make arrangements for it to be transferred to you. In straightforward cases, this usually takes a couple of weeks. However, it’s advisable not to make any monetary commitments until you’re given a completion date from your solicitor.
Enjoy your money
Once you have unlocked the wealth in your home, you are free to use the money however you like. Whether you want to help family members financially, carry out home improvements, travel or clear your debts for a more comfortable retirement, this is the time to do it. Find out more about they ways people use the money released from equity in their property click here.
Contact us for further advice
If you would like to know more about equity release and the latest options available, please get in touch and one of our advisers will be happy to offer you a personalised service. The experts at Access Equity Release can help you find a solution that is suitable for your circumstances.