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How long does it take to release equity?

View profile for Zoe Fellows
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Depending on the equity release plan you choose, it usually takes between 6 to 8 weeks to release equity in your home, assuming there are no complications along the way. With this route of raising funds becoming more popular, Zoe Fellows, Equity Release and Associate Solicitor in our Conveyancing team, explains the various stages to equity release and the timescales involved.

What are the different equity release schemes available?

There are two main equity release schemes available to you; a home reversion plan and a lifetime mortgage.

A home reversion plan means that all or part of your home is sold to a private company and in return you receive a cash lump sum, an income or both. Under this plan, you would remain in your home rent free or for a nominal monthly rent until the property is sold. At this time, the private company would receive the proceeds of the sale, depending on the share of the property that you sold. As the home reversion plan involves selling a portion of your property, it can take longer to complete than a lifetime mortgage plan, due to the additional paperwork required in the transfer of the property. 

A lifetime mortgage differs as instead of selling, you would borrow against the value of your home, which again could be paid as a lump sum, income or both. You can continue to live in your home and will retain full legal ownership, and the loan does not need to be repaid until you sell the property either in your lifetime or upon your death.

When entering into either type of scheme, you will need to consider the impact the lump sum or income will have on your welfare benefits, Capital Gains Tax, Income Tax and Inheritance Tax; an area we can discuss with you.  

What is the process of equity release?

Equity release is a legal process which requires the input from both financial and legal representatives. While every individual matter of equity release will vary depending on your individual circumstances, there are some commonalities. 

  1. The first step is to seek financial advice as to whether equity release is right for you. If you wish to proceed, you will then need to apply to an equity release provider. It is also wise to seek legal advice at this stage and choose your Solicitor. You can find out more about why you need to involve a Solicitor when releasing equity here
  2. Both the equity release provider and your Solicitor will ask for certain documentation and identification.
  3. The equity release provider may then instruct a surveyor to complete a valuation of the property to ascertain the current market value and if any development works are needed.
  4. Once an offer has been made to you by the equity release provider, this will also be shared with your chosen Solicitor. 
  5. As your Solicitor, we would arrange a meeting with yourselves and your financial advisor to discuss the offer, answer any questions you have and sign the documents.
  6. Once agreed, we will order the necessary searches and investigate the title of the equity release provider requires this.
  7. We will send a schedule of all the documents that you have signed to the provider, along with our signed certificate to confirm that you have received legal advice, which is a requirement.
  8. We will request delivery of the funds for the earliest possible date; however your equity release provider ultimately controls the timescales.

“We are seeing more people come to us asking about whether equity release would be a viable option for them as they seek to make renovations, or help a loved one onto the property ladder,” explains Zoe.  “While the steps may seem quite straight forward, there are many things to consider which we can help you understand, particularly if there are already existing mortgages or secured loans against your property.”

To discuss your situation with Zoe, you can call her on 01329 222079 or email zoefellows@warnergoodman.co.uk. Alternatively, you may also find the following resources useful:

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.