How long does the Equity Release process take?

Equity Release is the process of turning your home’s equity into cash that you can spend as you choose – but how long does it truly take?

It typically takes eight weeks for an Equity Release application to complete and for you to receive your money. Some applications take as little as three weeks; however, some complicated cases can take many months.

How long does Equity Release advice take?

Financial advice is a legal requirement, the best financial advisors will want to understand exactly what you want from life now and in the future. Equity Release advice is given on a case by case basis, some people may only need a day, others weeks or months. It’s important to take all the time you need as this is a huge financial undertaking.

Before you get started on trying to release stored value in your property you may want to try our equity release calculator.

How long does an Equity Release application take?

A lifetime mortgage (the most common type of Equity Release plan) takes 4–6 weeks to complete, whereas a home reversion scheme takes 6–8 weeks to complete, assuming the title is clear. The length of time it takes to complete your Equity Release is determined by the efficiency and experience of your solicitor.

Applying for Equity Release necessitates the completion of legal paperwork, which should be handled by a solicitor. You can avoid delays by finding a solicitor who specialises in Equity Release.

1. The Equity Release Application Process

After talking everything through, your adviser will make a recommendation based on your wants, needs and future plans.

You’ll receive a personalised illustration – this will show what fees are payable, how interest is applied, and the circumstances in which early repayment charges are applicable – make sure you discuss all these with your adviser.

2. Submitting the application to the lender

When the application form is done, it can be sent to the lender. People who apply for loans from different lenders do so in different ways. There are some that want the forms to be posted, some that want them to be emailed, and some that have special online portals for advisors to send in applications.

In any case, the lender will write to you to say that they have received your application, and they’ll hire a surveyor to figure out how much your home is worth.

3. A local surveyor determines what your home is worth

Because the amount you may borrow is determined by the value of your home, a local surveyor will determine its value.

A professional report for your property may be recommended by the surveyor. If they do, you may need to view this report before proceeding with your application, and if the report indicates that your house requires critical repairs, you’ll need to have this work completed before proceeding with your application. If you do need repairs to be completed, the surveyor may need to re-inspect your house once the work is completed.

4. The formal mortgage offer

When the lender gets the report from the surveyor, your application will be sent to the lender’s underwriters. This happens after the lender gets the report.

The underwriter’s job is to make sure that your home is safe for the person who is giving you the money. Keep in mind that lenders often have more than one source of money for different types of mortgages.

Once the underwriter is satisfied, a formal mortgage offer will be sent out to everyone. Each of you and your lawyer will get a copy of the mortgage offer on its own.

It usually takes about 48 hours for the lender to send the formal mortgage offer after they get the report from the surveyor.

Accepting an Equity Release offer is a contractual agreement, so you need to discuss it with a solicitor. Your adviser can help you arrange this.

The time taken by solicitors can vary. There are a number of factors which can influence it, such as how quickly you require your money, how familiar they are with lifetime mortgages, and whether there are any property title or matrimonial issues which need to be resolved. You will be responsible for paying your own legal fees.

6. Requisitions

The lender’s solicitors may raise requisitions (additional questions and documentation requests), which can be a lengthy process, depending on what is raised.

For “clean” applications, there may be no requisitions and the lender may go straight to setting the completion date. If this is the case, the lender will usually only require a few days to have the funds ready.

Always err on the side of caution and generally allow around 1-2 weeks until the completion date is met.

7. A completion date is set

Money is paid to your solicitor on completion. If there are charges to be paid, including any fees or debts secured against the property, these will be settled first.

The remaining funds are usually then transferred to your bank account. You may receive your money the same day if you pay for a CHAPS transfer; however, if you’re happy to wait it could be three days by BACs transfer.

What checks does the lender make?

For an application to go through to the end, the lender will do some checks to make sure money laundering and the Consumer Credit Act rules are met. A passport, driving licence, or other government-backed proof of ID will be needed to show that you are who you say you are.

If none of these are available, most lenders will also want to see a birth and/or marriage certificate as proof of who you are. Also, proof of where you live will be needed, so a recent utility bill or bank statement will be needed to show where you live.

Some lenders will also check your credit history, but not all of them do. You may be wondering why this would be necessary, since with a lifetime mortgage, there are usually no monthly fees. The lenders think that if someone has been irresponsible with credit payments in the past, they may not be as careful with their own property, which could hurt the lenders’ chances of getting their money back.

However, it would have to be very bad credit for a lender to turn down an Equity Release application because of bad credit. The majority of lenders will let people with past debts, debts that haven’t been paid, and even debts that have CCJ’s (County Court Judgments) on their credit file, unless they are very large.

Even so, most lenders will accept the application as long as the applicant has been honest about why the CCJ’s were used to get a loan. Undeclared bankrupts, on the other hand, are usually not going to be able to apply for Equity Release.

What can slow down an Equity Release application?

Unfortunately, there are some Equity Release applications which take many months to complete, and there are countless issues which can arise. Below are some of the issues which can slow down the Equity Release process:

Unregistered Title Deeds – If you believe that your property is not registered at The Land Registry then your title deeds will need to be inspected.

Enduring or Lasting Power of Attorney – If you have appointed someone to act as your representative under an Enduring or Lasting Power of Attorney then you must make the advisor aware as soon as possible.

If the document is registered at the Court of Protection then they’lll need to receive the original court stamped copy before proceeding any further.

Please note that an attorney will only be able to act for you where you do not possess sufficient capacity to act for yourself. In this event you will need your doctor or consultant to confirm your lack of capacity before proceeding. 

Leasehold Property – You will usually need to contact your free holder or managing agent to confirm that Ground Rent and any Service Charges are up to date. Even if you have not been requested to pay these charges your advisor may still need to provide the original copy of the lease to the lender’s solicitors.

Property subject to a Trust – In some circumstances legal ownership of your property may be subject to a trust.

The majority of providers will require details of this trust and may in some circumstances be unable to lend until the trust has been either revoked or varied by way of a Deed of Variation. It is therefore essential that any information relating to a trust affecting your ownership of the property is provided at the earliest opportunity.

Un-discharged Mortgages – Often, mortgages paid off many years ago remain un-discharged by the old mortgage provider. This may be a result of their offer to store your deeds for you or may be for another reason.

It is essential that any un-discharged mortgages are removed from your title in time for completion of the Equity Release.

Buildings Insurance Schedule – You will need to provide information regarding your buildings insurance to your Equity Release provider.

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