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  • By Tom Philips at May 20, 2023

Which Documents do I Need for Equity Release?

Equity release allows people over the age of 55 to boost their retirement income by unlocking the funds from their home.

They can either take out a lifetime mortgage or have a home reversion in order to get tax-free cash that does not have to be paid back.

The reason the cash does not have to be repaid is that the equity release lender sells the homeowner’s property when they enter long-term care or pass away, and they take the funds from the property sale to cover the cost of the loan.

Does Equity Release Take a Long Time?

Equity release does not take a long time compared to some other schemes, such as downsizing. It can take a few weeks if you are very lucky, but it usually takes around 68 weeks. In some cases, there are delays and the process will be longer.

The length of the process is generally out of your hands, as it depends on where you live, which lender you are with, what your financial situation is like, and what time of year you apply for equity release.

However, it is also important to remember that you can slow down the process if you are not very responsive.

The best way to combat this is to make yourself available to meet with the lender and advisers on a regular basis, do adequate research before applying so that you already know which decisions you want to make, and get a solicitor who can take charge of most of the process for you.

Please call our 24-Hour Helpline: 0330 058 1579

Is Equity Release Expensive?

This is subjective; equity release is expensive to some people, and inexpensive to others. Generally, most people agree that equity release is inexpensive as it tends to not exceed £3000. As you do not have to make repayments on the loan, it can be very affordable for people of all backgrounds.

However, equity release can end up being expensive overall if you do not pay it back, especially as compound interest is applied to it, which means the interest grows significantly each year.

This money will not be repaid by the homeowner, so it isn’t considered an expense by everyone, but the more money you owe by the end of equity release, the more money is taken from your property.

The type of equity release plan you select affects how expensive equity release will be for you. If you take out a second home lifetime mortgage, you will end up with less equity release funds as you will spend most or all of them on buying a second property.

However, if you get a drawdown lifetime mortgage and you only withdraw money occasionally, you will inevitably be left with more funds.

If you cannot afford the fees that come with releasing equity, you do not have to let go of the idea of being an equity release consumer. You can sometimes use your equity release funds to pay for the fees. There are also ways to keep the fees low, such as finding free advice and an inexpensive lender.

Please call our 24-Hour Helpline: 0330 058 1579

Is Equity Release Profitable?

Equity release is very profitable for some people, and not profitable for others. It depends on your personal financial situation, your plans for the future, and the decisions you want to make when it comes to equity release.

If you do not have a good amount of money for retirement, equity release could be very profitable for you.

It allows you to fund your retirement without owing money to a lender (which means you can spend the money on anything you desire). This tends to be preferable to a traditional loan, as there are no repayments, and you do not have to prove you earn a certain amount to qualify for funds.

Equity release would also be very profitable for someone with a high value property. The more money in your property, the more money you could access from it. Some people release life-changing amounts that allow them to enjoy the retirement of their dreams.

Anyone who does not want to leave money to someone in their will would find equity release profitable, as they can lend as much money as they want without worrying about how much value would be left in their estate.

We know that this is a fairly unusual situation, but it is worth mentioning as there are not many downsides to taking out equity if you do not have beneficiaries.

Please call our 24-Hour Helpline: 0330 058 1579

Which Documents Do I Need For Equity Release?

There are 10 documents you need for equity release, regardless of where you are in the country. These are:

  • Bank statements
  • Council tax and utility bills
  • Mortgage policy
  • Proof of identity
  • Title deeds
  • Occupancy waivers
  • Building insurance schedule
  • Building specialists reports
  • Power of attorney
  • Solar panel documentation

Why Do I Need Bank Statements?

When you apply for equity release, the lender will ask for your bank statements in the three months leading up to your application.

Traditionally, mortgage lenders ask for this as they need to verify that you can afford to take out a loan with them (1). However, as you know, you do not need to earn a certain income for equity release, so why are bank statements necessary?

The equity release lender needs to know about your financial situation regardless, as this will affect the type of equity release you qualify for. They also need to know that you do not have a current mortgage, as you cannot release equity until you have paid off your conventional mortgage.

Please call our 24-Hour Helpline: 0330 058 1579

Why Do I Need Council Tax and Utility Bills?

You need to provide proof of your council tax and utility bills, to demonstrate that you do not own a separate housing on your property. It is also a way for the equity release lender to see proof of your address.

Just like the bank statements, the utility bill statements need to be recent. It is usually requested that they are dated within the last three months.

Why Do I Need Mortgage Policy?

It is vital that you provide information of your current mortgage if you still have one. This usually involves giving the mortgage lender’s information and the reference number for the policy you have, which will help the equity release lender to investigate the type of mortgage you have.

It is preferred that you do not have a mortgage when you apply for equity release, but if you have not yet paid it off, the lender will ask you to do this either using your own means or using the equity release funds when you get your loan.

Please call our 24-Hour Helpline: 0330 058 1579

Why Do I Need Proof Of Identity?

Proof of identity is very important in an equity release application as the lender needs to trust that you are who you say you are. The accepted forms of identity are the same as they are for most schemes:

  • Driving licence
  • Passport
  • Birth certificate
  • Marriage certificate

However, make sure you check which forms of identity your equity release lender accepts, as some have more specific requirements than others.

Why Do I Need Title Deeds?

By presenting the title deeds of your property, you are providing proof that you are the owner of your property. If you want to make a joint application for equity release as a married couple, the title deeds will need to show that you are both owners of your property.

If you get an equity release solicitor, they can deal with checking the title deeds and presenting the information to the equity release lender. They can also make amends to the title deeds if necessary.

Find out what else equity release solicitors can help with, and how much they may charge, by browsing our article on equity release solicitors.

Please call our 24-Hour Helpline: 0330 058 1579

Why Do I Need Occupancy Waivers?

If you are living with anyone else whose name will not be on your equity release application, you need to get them to sign an occupancy waiver. This applies whether they are family members, lodgers, or caregivers. It does not apply to individuals who are under the age of 17 (2).

Occupancy waivers demonstrate that the people you are living with agree to vacate the home when your equity release plan comes to an end (either when you die or go into long-term care). They should seek professional legal advice to ensure they are aware of their rights.

Why Do I Need Building Insurance Schedule?

Your building insurance schedule will tell the equity release lender if you have ever had a property flood in the past. This will help them to put things in place in case this happens again e.g. amending the insurance to account for the previous flooding.

At this point, the lender could say that they do not want to offer you a loan if they believe it would be too risky to do so. Alternatively, they could accept you as an equity release customer, but offer you a lower loan amount.

Please call our 24-Hour Helpline: 0330 058 1579

Why Do I Need Building Specialists Reports?

Building specialists reports give the lender information about your property that they may not uncover simply by requesting a property valuation. The information relates to electrics, gas, wall ties, damp, plumbing, and various other things that affect the condition and value of your home.

Why Do I Need Power Of Attorney?

Most people do not need a power of attorney when applying for an equity release plan. However, if your partner is in long-term care and will be releasing equity with you, it is important that you organise this.

This is because you need the power to make decisions on behalf of your partner if they are deemed too vulnerable to make these decisions in the future. If you do not do this, the legal side of equity release can get complicated in the future.

To find out more about what a power of attorney is and how you can get one, have a look at our detailed article on the subject.

Please call our 24-Hour Helpline: 0330 058 1579

Why Do I Need Solar Panel Documentation?

Again, this is not a document that every single equity release customer will need to provide. It is only necessary if you have solar panels on your property. The equity release lender will check that you are allowed to keep your solar panels based on the legal requirements in the UK.

Why Should I Use Equity Release Warehouse For Equity Release?

As you can see from our detailed help centre and our informative blogs, we have a wealth of information about equity release that we are ready to use to help you get started with your equity release journey.

There is no situation that we cannot deal with – whether you haven’t yet paid off your mortgage, you cannot afford equity release, or you want to leave a large inheritance, we are ready and waiting to offer personalised advice on how you can release equity safely.

Please do not be overwhelmed by the 10 documents we have listed. Remember that you may not even have to provide them all, and most of them are requested by most housing schemes anyway, so you will already be familiar with them.

What’s more, if you find an equity release solicitor in your area, they can take charge of most of the process for you. This will relieve stress and allow you to spend time thinking about how you would like to experience equity release.

The equity release adviser that you meet with should also be very supportive when it comes to requesting documents from you. They are aware that equity release is not a mainstream scheme, so you are bound to need time to get used to it.

Our advisers are willing to spend plenty of time with you to help you learn more about the equity release process. If you call 0330 058 1579, you will see exactly what we’re talking about. Don’t delay your call, as releasing equity from your home may be the best thing you ever do.

References

[1] Bank Statements and Mortgage Applications https://www.nidirect.gov.uk/information-and-services/benefits-and-money/managing-money

[2] What is an occupier waver form? https://hoa.org.uk/services/ask-an-expert-2/ask-an-expert-i-am-buying-questions/what-is-an-occupier-waiver-form/

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