When your solicitor asks for bank statements dating back months, please believe us when we say they are not just being difficult! Gemma Francis, a Conveyancer in WSP Solicitors’ Residential...
How can I release the equity in my home?
Some lenders have changed their rules so equity release can proceed without the need for face to face meetings, due to the COVID-19 pandemic.
Lucy McCallum, Deputy Head of Residential Property at WSP Solicitors examines equity release in more detail to help with your decision.
All decisions about equity release should go through a financial adviser first. We will only administer the legal aspects for you and cannot advise if it is the right option for you.
What is equity release?
The equity (or cash) in your home is the market value, less the amount of any outstanding mortgages or loans secured against your home.
You may have heard of the term ‘Equity Release’. This term refers to a range of products that allow you to access the equity tied up in your home. These products tend to be aimed at people over the age of 55 who may not be eligible for a standard residential mortgage.
The money you release from your home can be taken as:
- a lump sum payment
- in several smaller
- or a combination of both
The money you release will need to pay off any existing mortgage first. The rest is yours to spend as you choose. You may wish to use it for home improvements or to help your family.
What are my options for Equity Release?
There are two main options:
This is the most popular way of releasing equity. It is a special type of mortgage secured against your property that runs for the duration of your lifetime. There is no fixed term.
Please bear in mind that people are living longer so the earlier you start a lifetime mortgage the more it is likely to cost in the long run.
The property must be your main residence and you will retain ownership of your home.
You can choose to make interest payment each year to keep the overall amount down or make no payments and allow the interest accrued to be added to the amount due to be paid back when you sell the property, die or move into long term care.
The products available will vary between lenders.
You agree to sell part or all of your home to a home reversion company in return for either a lump sum payment or smaller regular payments.
You will have the right to remain living in the property until you die, without paying any rent but you will be obliged to maintain and insure the property.
You can choose to retain a percentage of the value of the property to sell to the company at a later date or for inheritance.
Once the plan has ended, the property will be sold and the sale proceeds would be shared between you and the company in the proportions of ownership agreed if you have not sold 100% to the company.
How long does equity release take?
On average, releasing the equity in your home will take around 8 – 12 weeks from start to finish.
You will need to make an appointment with a specialist equity release financial advisor to discuss your options. Once you have received a lifetime mortgage offer or a home reversion plan offer, you will need to choose a solicitor who specialises in equity release, who will meet with you to provide independent advice on the terms of the offer, and will deal with the legal documents required by the lender and arrange for the funds to be released.
WSP Solicitors can advise you further on equity release and all areas of the conveyancing process.
Our dedicated Residential Property Team are here to help you with anything related to buying or selling your home. You can contact Lucy directly here or by using the form in the sidebar of this page. Alternatively, you can call us on 01453 847200. We are still here to make your life, less complicated.