Equity release is one of the ways of unlocking the value of your home and turning it into a cash lump sum. Older homeowners over the age of 55 years and above do not have to sell up or move out of their home to secure some money.
The process a reputable equity release comes in two schemes: lifetime mortgage and reversion schemes. When deciding which plan to go for, it is advisable that you seek both financial and legal advice.
You can also speak to an equity release specialist like responsibleequityrelease.co.uk.
The lifetime mortgage is the most common type of equity release. If you have no one to inherit your property, it is a perfect, though expensive, way to raise cash. On the other hand, home revision involves making tax-free money for a portion of your property at below market value.
Here are four stages you have to go through to obtain your equity release.
- Eligibility Calculator
It is the first step is to establish whether you are eligible for an equity release. An eligibility calculator will help you know whether you qualify, and if so, how much money you can get from a lender. The amount depends on your age, health, lifestyle, and the worth of your house.
The older you are, and the higher the value of your home, the more equity you can release.
Therefore, it is proper that you contact an expert advisor. An advisor will help you understand the choice you are making.
- Face-to-Face to Cover the Options
After deciding to move forward with a lifetime mortgage, consult with an independent financial advisor (IFA). The IFA will make you understand the whole process. He/she will also show you the available products in the market so that you get the best deal.
Upon settling on the best deal, the financial advisor will guide you through the paperwork. You should not pay him/her any amount until you complete the whole process.
- Make the Application
The application moves forward promptly but depends on the experience of your solicitor. A lawyer experienced in equity release could help speed up the process. Make sure that you accurately fill and complete the application form since a single error may affect your eligibility.
While your application is underway, the equity release provider will include a surveyor to evaluate your property. Once the surveyor confirms the value and status of your property, the equity provider will move to the final step of your plan.
Often, the completion step takes up to 12 weeks. Your solicitor and the equity provider will conduct a legal charge on your property. Both teams will together perform checks to ensure that the property is a suitable security for the plan. Some problems may arise during these checks, but it is very uncommon.
Your solicitor will then set a formal completion date at this stage. You will have to sign the legal charge and a certificate confirming that the solicitor has explained everything to you.
Ensure that you have no issues with the terms.
Once the completion date expires, the equity release provider will move the funds to a bank account of your choice.
You can now use the equity release funds as you see fit. You may take the whole amount or opt to withdraw it more than once in smaller amounts.