How long does equity release take?

Equity release allows UK homeowners over 55 years of age to release money from their home without having to move.

There are two main types of equity release plan; home reversion and lifetime mortgages. We’ve outlined the key differences between them below.

What are the key differences between lifetime mortgages and home reversion plans?

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Lifetime mortgage

  • Although it’s a mortgage, you don’t have to make regular payments.
  • However, you can if you choose to do so.
  • Interest on your mortgage is added to the balance monthly (or annually).
  • However, many products give you the option to pay some or all of this interest if you prefer to do so.
  • The loan is usually paid back either when you die or move into long-term care.
  • Paying back the loan early could result in early repayment charges.
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Home reversion

  • Provider buys your property (or a share thereof) and in return, you receive a regular income or lump sum.
  • Because you continue to live in the property rent-free until you die, or move into long term care, the amount you receive will be below the full value of your home.
  • When the property is sold, the provider will receive their share of the proceeds based on the agreement you have made.
  • If you wish to buy back a share of your home from your provider, you will have to do so at the property’s full market value.

How long does it take to release equity?

A lifetime mortgage application usually takes between 5 and 8 weeks in total. The process involves a considerable amount of legal work and its duration will depend on how efficient and experienced your solicitor is.

If you want to keep delays to a minimum, taking some time to find a solicitor experienced in the legalities of equity release might be worth your while. The key equity release stages are as follows:

Consultation

Lifetime mortgages can only be taken out through a qualified, regulated adviser. During your initial consultation, they will discuss your unique situation.

They will also answer any questions or concerns you might have. Your adviser might make an estimate of how much you could release and offer some early suggestions.

Fact find

If you’re happy to go ahead, it’s time to go into things in more depth. At this stage, your adviser will go over your finances in greater detail. They will discuss your priorities to help you decide if equity release is right for you and whether a lump sum or a drawdown equity release plan meets your needs best.

Presentation

Based on the information gathered during the fact find, your adviser will research the best products from across the market that meets your specific requirements and needs. Once they have done this, they will then present their recommendations.

Application

Once your adviser has made you aware of the benefits and risks of their recommendation, it’s decision time. When you’ve weighed up the options, your adviser will complete the application with you and send it to the provider.

Valuation

Your provider will now assess your application, obtain credit references and send an independent surveyor to value your home.

Mortgage offer

Once the provider is satisfied with their valuation of your home and your application, they’ll send out your mortgage offer. You, your solicitor and your adviser will then check that everything is in order and if so, your solicitor will set about completing the legal work.

Solicitors appointment

Prior to completing on your lifetime mortgage you will be required to meet with your solicitor, this could be in the solicitors office or in your own home. During the appointment the solicitor will ensure you understand the nature of the agreement you are entering, take copies of your identification and arrange for you to sign the mortgage offer acceptance.

Completion

With all legal work complete and the mortgage offer signed, your lender will then arrange a date to release the funds to your solicitor. In most cases, all legal and adviser fees will be deducted from the amount released on completion.

The legalities of equity release

Releasing equity from your home is a major decision and one that requires professional advice. The Equity Release Council stipulates in its rules and guidance that you must have independent legal advice as part of the equity release application process.

The equity release solicitor’s role begins when you’ve received what providers refer to as an ‘offer’. To comply with money laundering regulations, they will then carry out an identity check and once this is done, they will check the title deeds and other paperwork related to your property.

Paying off your mortgage with equity release

If you’re using your equity release funds to pay off your existing mortgage, your solicitor will also take care of that at this stage. Finally, your solicitor will arrange a completion date with your lender and handle the transfer of funds into your bank account.

This process is likely to be faster if your solicitor is experienced in equity release. To ensure this is the case, choose a solicitor who is a member of the Equity Release Solicitors Alliance.

Equity release calculator

Find out how much equity you could release with our lifetime mortgage calculator and download your free guide to equity release.

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