Frequently Asked Questions
Equity Release Council
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Frequently Asked Questions
You can usually release between 20% and 60% of
the value of your property. There are eligibility criteria that would need to be me and each
case varies depending on individual circumstances. The two main factors that
are considered by the providers are the value of your property and your age.
The lenders will consider the number of years you may have the plan for and
will work this out based on your age and health. For joint applications they
will only base the term on the youngest applicant’s health and age. Generally the
older you are (the youngest applicant) the more equity you will be able to
release. Try out our equity release calculator for your free estimation.
Yes, there are fees associated with equity release. These
can vary and will depend on all parties involved in the completion of your
mortgage- The mortgage broker, the lender, and your solicitor.
Your mortgage broker is the intermediary for an application.
They will consider your individual needs and find the most suitable deal
available to you with a lender that is likely to accept your application. They
will advise you on which deals is most suitable after completing a full Fact Find with you.
Your advisor will be aware of the lenders criteria and whether they are likely to offer you a mortgage deal.
At Ocean Equity Release we charge a very competitive rate of
£1,490. Our fee is always agreed prior to advice being given and is one aspect covered in our Client
Agreement. The fee is only paid to us oncompletion of the mortgage.
Lenders may charge an arrangement fee in order to set up a
lifetime mortgage. This can vary between £0 and £995. As with any mortgage a
valuation will need to be completed on your property. This again can be a cost
charged to you by the lender. Many lenders have reduced their fees and will offer these
for a lower amount, or free. Your broker can look further into these charges for you when sourcing the deals that meet your circumstances.
When taking out any mortgage it is a requirement to
appoint a solicitor to act on your behalf and to complete the conveyancing. Solicitor charges will vary depending on who you chose. We have found that the average amount for an equity release specialist solicitor is
around £750 plus VAT and disbursements.
The money that you release from your property is not
taxable. The money you receive is a loan and not income, just like a
residential mortgage. However, what you do with the money may be applicable to
tax. For example, if the money released is to re pay an existing mortgage, then
the funds will be used immediately, making it exempt from tax. If you decide to
put the money released into savings accounts this could be taxable.
If you require an amount of money that you do not intend on using immediately there is a drawdown option. This is where the money is held for you, and you can draw it down as and when it is needed. You are not charged the interest on the held amount until you draw it down. It will then be charged on the lenders prevailing interest rate. Please speak to an adviser in depth to see if a drawdown deal is best for your individual circumstances.
Depending on your personal circumstances these could be affected, so please discuss matters with your equity release adviser.
The main form of Equity Release is also known as a lifetime
mortgage. The mortgage will come to an end when the applicants die or move into
long-term care. This means if one spouse or partner dies, the survivor will be
permitted to continue to occupy the property until death, going into permanent
residential care or vacating the property for other reasons. This means that
under a Lifetime Mortgage you own your home throughout the term.
With a portable plan, you can often take the plan with you if you move house.
Some plans allow you to repay the whole loan and interest –please note there may be an early repayment charge which can be expensive.
Depending on your plan, you may be able to borrow more based on an increase in your property value.
This varies based on your circumstances, age, property value and the plan chosen.
Although equity release reduces the value of your home, any money remaining when it is sold, and the equity release plan repaid, will belong to your estate.
Your house can be sold by you or your legal advisor if you go into long-term care. If you die, it will be sold by the person who is dealing with the administration of your Estate.
This is dependent on many factors such as: choosing a good equity release advisor, your readiness, the solicitor that you chose and the efficiency of the lender. A good advisor will keep you informed, have good communication with you and have your interests as the main factor. You can search for a good advisor via google and reading their reviews from previous clients or by visiting the Equity Release Council website:
When it comes to submitting an application, this will only be done once you are ready, and all of the relevant documents are collected by the advisor. To prepare for an application you can ensure that you have in-date identification, bank statements and any information relating to outstanding debt ready to send to the advisor. When choosing an equity release specialists solicitor your advisor should offer you some recommendations of firms that they have worked with before who they believe offer a great service to clients. If you are in a hurry for the funds to be released it is best to talk to your broker and ask which lenders, they believe to be efficient and quick.
Once you are at the stage of selecting a deal and your broker is ready to submit an application for you it takes approximately two weeks for an offer to be issued, following a valuation on your property. Your solicitor will then complete the conveyancing work. This timescale will depend on the complexity of your transaction. A standard transaction can take anything from one to three months and a more complicated case can take longer than this, sometimes up to six months.
Yes, you can. There is currently one lender that allows lifetime mortgages on these types of properties; however, their lending criteria may be more rigorous. Seek further information from a specialist Equity Release advisor for more details on this.
This question is one that is being asked about Equity Release mortgages on a frequent basis. If one partner is over the age of 55 and one is under the age of 55 it may still be possible to obtain Equity Release.
There are many factors that determine if Equity Release is suitable to consider, however one of the lenders does consider applications from a married couple when one partner is not yet aged 55.
There are various considerations around this that need to be discussed with a qualified advisor as this may not be the correct advice for your circumstances.