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Can You Be Refused Equity Release?

In many ways, it is easier to qualify for an equity release loan than a conventional loan. However, there are still eligibility requirements that must be met for each equity release provider and equity release plan.

This applies to both lifetime mortgages and home reversion schemes.

To start with, equity release customers need to own a property that is worth £70,000 or more.

The sale of this property will eventually allow the loan to be repaid to the lender, so it is vital that every customer is a homeowner, and that their home is deemed valuable by their equity release provider.

Another requirement for equity release is to be at least 55 years old (1). Homeowners hoping to take out a lifetime equity release mortgage must meet this criterion.

This is usually not an issue, as most customers use equity release to fund their retirement, so they do not need this loan before they are at the minimum pension age.

Even if they wanted to spend the loan on something else, the minimum equity release age is always 55 as it prevents the customer from owing a huge amount of money to the lender, which would result in equity release being pointless for lenders.

The same logic applies to home reversion plans, but the minimum age is 65 as opposed to 55 years old.

Finally, to get involved with the UK equity release scheme, you must live in this country. If you want to get a second home lifetime mortgage or a buy-to-let lifetime mortgage, you can purchase a home abroad, but you must carry out the equity release process here in the UK.

For an in-depth discussion of eligibility for equity release, head to this page on our site.

Please call our 24-Hour Helpline: 0330 058 1579

Can You Be Refused Equity Release?

Yes, you can be refused equity release. Equity release lenders are allowed to refuse you because you do not meet their eligibility criteria, or you are not suitable for the plan you are applying for.

For example, if you applied for a buy-to-let mortgage but your home was low value, you may be rejected on the basis that your loan wouldn’t cover the purchase of a new property.

The main reason that you will be refused equity release is that you do not meet the requirements we have listed above. If you are under 55 years old, you cannot take out equity under any circumstances.

The only resolution to this is to wait until you turn 55 years old. However, if your partner is over 55 years old, they could start the process on their own.

Be wary that this could cause further complications, as you would not be entitled to your property if your partner went into permanent care or passed away before you. This is because the equity release lender would need to sell the home and take the money.

You could also be refused equity release if your property is worth less than £70,000. There must be a minimum value in the equity release scheme, otherwise, lenders would be offering attractive loans and not getting much in return. There are some other common reasons your property could be rejected aside from its value, such as being in a poor condition, or not being owned outright by you.

Finally, if you live abroad, you would not be able to take out equity in the UK. You must be able to present a suitable property that is located in this country.

However, you may find that there is a thriving equity release scheme in your country that you could get started with.

Please call our 24-Hour Helpline: 0330 058 1579

What Are Your Options After Being Refused Equity Release?

Firstly, you could make an attempt to become eligible for equity release. Not everyone can do this, but we find that many of our clients choose to do this as they do not want to let go of the equity release scheme.

We will give some tips on how to increase your eligibility for equity release further down this page.

Secondly, you could move to a cheaper property before enjoying retirement. Downsizing allows you to get your hands on more money without having to take out an equity release loan.

Other benefits may include: living closer to family, having a more comfortable income, finding housework more manageable, and not having to deal with compound interest payments.

Some drawbacks to downsizing are: property is currently very expensive, you may not be able to move to your preferred area, moving house is very overwhelming, and you may already have a home that is small and fairly affordable.

Another option would be to dedicate more years to working. Having a reliable monthly income means that you do not have to concern yourself with loans, which can help you to avoid debt.

You may also benefit from the social element of work, as many people struggle with loneliness when they retire.

On the other hand, working takes a toll on you as you get older, it can be expensive to commute every day, and you may have plans for the future that are not compatible with working full time.

One of the advantages of equity release is that you can achieve lifelong goals without sacrificing your comfort.

Finally, look at your benefit entitlement. Claiming means-tested benefits can increase your retirement funds.

Many people are eligible for state benefits that they are not currently claiming, so we advise researching the different government benefits and looking at the eligibility criteria.

Some examples of benefits you could get are: pension credit, the war widow(er)’s pension, disability living allowance, and carer’s allowance.

The only possible downside to claiming government benefits is that it may stop you from qualifying for other loans.

This is why it’s important to do your research before applying. Aside from this potential roadblock, there are no other disadvantages of getting benefits, as they are there to help you as you try to fund life after work.

Please call our 24-Hour Helpline: 0330 058 1579

Tips to Make Yourself Eligible For Equity Release

It is not always possible to simply make yourself eligible for equity release. If your home is worth less than £70,000, and you do not have savings, you may be unable to qualify for equity release as you cannot simply move into a valuable property.

Yet, some of our clients come to us with the belief that they will never qualify for equity release, and this turns out to be untrue. Sometimes, there are things you can do to change your situation, and we want to advise you on this today.

If you are too young to release equity, you could get your finances in order as much as possible, and plan to take out equity when you turn 55 years old.

Though you do not have to have a large amount of money to be an equity release consumer, you need to pay for application fees, equity release advice fees, legal advice fees, and other costs relating to the scheme.

Furthermore, the more money you have, the easier it will be for you to qualify for a repayment scheme, such as the voluntary repayment lifetime equity release mortgage or the interest only lifetime mortgage. This can help you to keep the owed funds low, which will benefit your family in the future.

That all said, there is no need to worry if you go into equity release without a lot of savings. Plenty of equity release consumers are in this exact position, and their loan allows them to avoid poverty.

If you have not been accepted onto a particular equity release product, it is often easy for you to get accepted onto a different one. Make sure you know all about the plan you are applying to, as this can help you to avoid another rejection.

Please call our 24-Hour Helpline: 0330 058 1579

FAQs About Equity Release Eligibility

Below, we list some common questions and answers about equity release eligibility:

1. Are there any affordability checks in the equity release application?

There are sometimes affordability checks in the equity release application. Lenders may ask about your income and your credit rating.

However, most of the time, this will not stop you from taking out equity, as it is not a main requirement of equity release to be a high earner, or to have a good credit report.

Certain plans will rely on affordability more than others. For instance, if you want to buy a home via the second home equity release plan, you will need to be able to prove that you can fund this.

However, it is possible to fund this without having lots of money; you could have a high-value property, which would result in a very high loan.

Most of the common equity release plans do not require you to earn a certain amount of money. The idea is that you can loan money whether you are very comfortable or you are struggling, as there are no deadlines for repayment.

2. Can you be refused equity release even though your partner has been accepted?

Yes, you could be refused equity release even though your partner qualifies for it. There are many reasons this could occur, but the main ones are that you can be younger than your partner, and you can live on a property with your partner that you do not own.

You will always be told that you are not eligible for an equity release plan before the process begins. This means you and your partner will have time to decide whether you want to avoid equity release, or take equity out of your property in just your partner’s name.

If you and your partner are over 55, and you own a property together, it is very likely that you will be able to release equity together.

3. Can you be refused equity release for being too old?

It is much less likely that you will be refused equity release for being too old than being too young. There are no equity release rules to suggest that someone over the age of 70, 80 or 90 cannot take out equity from their home.

Certain equity release plans have benefits for people over a certain age, such as lower equity release interest rates or more equity release funds. It is worth looking into this if you are over 70, as you want to make sure you are on the plan that is the most profitable for you.

Yet, we do have to state that most equity release companies do not like lending to people over the age of 90, despite there being no official rules about this (2). This means it has been known for people over a certain age to be refused equity release due to being too old.

This is less of a problem for people who are between 60-80, so do not worry just because you are not as young as some equity release consumers. This scheme is mainly for people in retirement, so it is to be expected that you are going to be above a certain age for equity release.

4. Can you be refused equity release by one lender, but be approved by another?

Yes, you could be rejected by one lender and approved by another. All lenders that are regulated by the Equity Release Council (ERC) and the Financial Conduct Authority (FCA) will follow a set of standard principles, but they will also have their own additional requirements.

This means they are allowed to refuse to lend you money for their own reasons, such as requiring a property that is more valuable than £70,000.

If this occurs, you can go back to the first stage and look for a new equity release company that is willing to lend money to you. It is usually not difficult to find one, as most companies do not have unreasonably strict requirements.

5. Can you be refused equity release on one plan, but accepted for another?

Yes – just because you are rejected from one equity release plan does not mean that you will be rejected from them all. Equity release plans are diverse, so there are many reasons you could be suited to one, but not another. If this occurs, you can contact the equity release lender and ask to apply to another plan.

To give a realistic example, you could be rejected from the home reversion plan as you are under 65 years old, but accepted onto a lump sum lifetime equity release mortgage (for which the minimum age requirement is 55 years old).

You could equally be rejected from an enhanced lifetime mortgage due to not having any health conditions, but accepted onto a drawdown plan instead.

Our clients are rarely faced with this challenge, as they have already sought our professional advice on which plan to apply for.

We will advise you to stay away from plans that are not suitable for you, which means you can avoid pointless applications that are bound to be rejected.

Please call our 24-Hour Helpline: 0330 058 1579

Can Equity Release Warehouse Tell Me Whether I Am an Eligible Customer?

Yes, we can give you advice on whether you are eligible for equity release, and which plans you would be eligible for.

We value transparency, so we will be honest if we feel you are going after a plan that is not compatible with your individual circumstances. This prevents you from filling out an application that is only going to be dismissed.

If you want advice on the alternatives to equity release, we would be happy to talk about downsizing, working past retirement age, and claiming benefits, in more detail.

We can also discuss some alternatives we have not talked about today, such as remortgaging your home, getting a traditional loan, and getting government grants.

Once we confirm that you are eligible for equity release, we can help you to figure out your next steps. This usually consists of speaking to your family, researching different equity release products, and starting your application.

We can take you through the entire application process if you would prefer to avoid the challenge of doing this alone.

To get a callback from Equity Release Warehouse, leave your contact details here. You are also more than welcome to call us on 0330 058 1579 between 8am to 8pm on weekdays and weekends.

When you get in touch, we will ask what you would like to know about the equity release scheme. If you are keen to get involved, we can schedule further appointments with you to allow time for making the application.

On the other hand, if you would rather take it slow and see how you feel, we will not rush you into making additional appointments with us.

Please call our 24-Hour Helpline: 0330 058 1579


[1] Equity release

[2] What are the equity release options for you?

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