Frequently Asked Questions
Equity release is a big decision, and we know that, that's why our specialist advisers are on hand throughout the whole process to help you make the right decision.
We've compiled some of the most frequently asked questions, to help you understand if equity release is right for you.
All of our lifetime mortgages fully meet the Equity Release Council’s product standards and therefore feature a no negative equity guarantee. This means that your family or friends will never owe more than the property is worth when it is sold, provided it is sold for a reasonable price. They might find that the house is not worth enough to cover the amount which you owe, and in these circumstances, the no negative equity guarantee means that the remainder of the loan will be written off.
No, you will not lose your home, however whether you continue to own it does depend on which type of equity release plan you take.
With a lifetime mortgage you own 100% of your home and can continue to live in it. The loan is secured against your home, much like a conventional mortgage.
For a home reversion plan you sell part or all of your home to a lender, who will then receive payback from the eventual sale of your home. You have the right to reside in your house if you take out a home reversion plan, subject to meeting lenders terms and conditions.
If you are the second/only person on your plan, it will terminate, with a lifetime mortgage. You or your loved ones will likely need to repay the loan, plus any interest accrued within 12 months. Often, this comes from the sale of the house and there are no early repayment charges (ERC).
This will depend on your age and the value of your property. The older you get, the larger percentage of the value you can access. Some lenders also take into account your health and lifestyle to increase the amount you can release.
As an example, a 70 year old might be able to release up to 38% of their homes value.
We talk through all these factors with you during your no-obligation fact find appointment, before advising you whether or not we think that equity release is your best option.
We provide initial advice for free and without obligation. Only if you choose to proceed and your case completes would a fixed fee of £1,695 be payable.3
Some of the equity release plans available are drawdown lifetime mortgages, which let you take money whenever you want, rather than as a single sum. You’ll be given an initial cash lump-sum, as well as an approved amount in reserve which you can access at a later date.
This is a great facility to have if you think you may want some cash at a later date as you won’t start paying any interest on the reserve until you actually use it.
You do have the option of applying for a further advance, which may provide you with additional funds. However you will need to seek advice from your adviser and another survey will be carried out.
Yes, you can repay your lifetime mortgage early – however it is not a requirement to do so.
You can repay all or some of what you have borrowed.
You can make partial repayments, and some plans will allow you to payback up to 10% without any early repayment charges.
You can also payback the loan, plus any interest accrued, in full. For example, if you are downsizing and cannot move the plan to your new home. However, in this instance, an early repayment charge can be quite high, so ensure you speak with an adviser about downsizing protection, which is when some lenders may agree that you can pay back your loan early without an early repayment charge.
If you take out a lifetime mortgage, the interest rates can be fixed – for life. This means that even if interest rates increase, you’ll still only receive the same rate of interest which was agreed in your plan.
On the other hand, if interest rates go down, you can take advantage of our free plan review and your adviser will see if there is a better deal on the market. If there is, and it’s in your best interest to switch plans – as well as meeting existing or new lenders criteria, your adviser will present this to you.
If you do decide to switch plans, and only when your case completes, will a fixed fee of £1,695 be charged.
If you can switch plans depends on a couple of things, such as whether you qualify for the latest plan developments, the amount outstanding on your equity release plan including any interest accrued and any potential early repayment charges that may be applicable.
Yes, you can. If this is something you’re planning to do in the future, or want to have the option to do, speak to your adviser. It may be that if you’re downsizing, you could have to repay a portion of the plan, if the value of your new home doesn’t match the value of your loan. You will also have to ensure that the new house meets the criteria and standard of the lender, so it’s always best to speak to them first before committing to a new house.
When releasing equity from your home, you are required to speak to a professional, qualified equity release adviser. This is because equity release comes with both benefits and considerations, therefore speaking to someone will ensure you have all the information you need to make the correct decision for you.
We provide initial advice for free and without obligation, which means we’ll find out about you, your circumstances and your objectives, then provide you with a full, written recommendation with a value and a plan that will best suit you. We have access to the whole of the market, so we can secure you the best plan for your individual circumstances.
Our advisers will never recommend equity release unless we think it is in your best interest.
If you decide to proceed and only when your case completes will a fixed fee of £1,695 be payable to us.
In addition, there will be some Solicitors fees to pay which is typically around £990 in England and Wales. This is for things such as searches, conveyancing and to check customer understanding.
Some lenders may also charge a fee for some of their plans while others may offer cash back. Your adviser will make you aware of these plans if they are suitable for you.
You can choose to pay separately or add it to the equity release plan. If you include in the equity release plan it will accrue interest.
On average, from application to receiving your money, the process takes between 6-12 weeks. We will always try to be as efficent as we can, however sometimes there can be unforeseen issues along the way which can delay the application.
Once you’ve applied for equity release, and if everything is straightforward, there will be a property valuation and a solicitor meeting (to ensure you have had the required legal advice) before you receive your money. There may be a need for the lender’s solicitors to raise additional questions and see further documentation, however your adviser and their team will be on hand and help throughout the whole of the process until it completes.
If you’d like to speak to one of our specialist advisers, to learn more about equity release or
if you have further questions, call us today on 0800 0155 142.
Your Advisor will tell you everything you need to know about equity release including the effect on the amount of inheritance you can leave and if your entitlement to means-tested benefits could be affected now or in the future.