Navigating the equity release process can often seem daunting for homeowners keen on tapping into their property's value. 

While the promise of releasing tied-up wealth is appealing, the journey involves multiple steps, each with its own significance. 

Every phase requires careful thought and understanding, from initial considerations to finalising the agreement.

This article offers a clear roadmap of the process, breaking down the stages and highlighting essential checkpoints, ensuring homeowners are well-equipped and informed as they embark on this financial venture.

Let’s get started.

6-Step Equity Release Process

The 6-step process is:

• Initial research
• Getting professional advice
• The application process
• Property valuation and surveyor appointment
• Receiving your offer and signing the paperwork
• Concluding your plan and receiving the funds

Here’s a detailed breakdown of what you need to know about each step.

#1. Initial Research 

Before diving into equity release, it's crucial to undertake preliminary research to equip yourself with foundational knowledge and tools to better understand the process and its implications.

Discover what’s equity release, if it’s for you, and how to use a calculator tool.

What’s Equity Release & Is It for You?

Equity release refers to financial solutions allowing homeowners to access the value of their home without having to sell. 

It's suitable for certain individuals, typically older homeowners over 55, seeking funds without moving out.

Use an Equity Release Calculator

An equity release calculator is an online tool that estimates the potential equity one can release based on property value and homeowner's age.¹

While it can provide an estimate, you’ll need a proper valuation and quote to see exactly how much equity you can unlock.

You can try our calculator tool right now.

#2. Seek Professional Advice

The importance of seeking professional advice is not only paramount but also mandated by the Equity Release Council.²

This includes:

• Consulting an Advisor: Engaging with an expert or specialist in the field ensures that you gather detailed insights, address your pressing questions, and chart a path that aligns with your objectives.
• Evaluate the Costs: An advisor's expertise helps decipher the myriad of potential charges, from rolled-up interest rates to application fees, allowing you to grasp the long-term financial ramifications and ensuring full transparency.

#3. The Application Process

Initiating your equity release journey entails a structured application process, laying the groundwork for unlocking the value in your home.

You’ll do so through your chosen lender.

Scheme Selection

Before paperwork begins, understand the 2 main schemes:

1. Lifetime Mortgages: Borrow against your property's value, repaying the amount when the property is eventually sold.
2. Home Reversion Plans: Sell part or all of your home to a provider in return for a lump sum or regular payments while residing there.

Documentation

Essential paperwork includes:

• Personal details such as age and marital status.
• Property specifics, including age and existing mortgages.
• Current financial status, detailing debts, assets, and income.

Application Review

Post-submission, the provider evaluates:

• The property's aptness for equity release.
• The applicant's financial status to ensure mutual feasibility.

Feedback may be requested, and terms could be adjusted based on the provider's assessment.

Conditional Approval

Once aligned, the provider typically grants conditional approval, signalling a positive progression in the process.

The application stage, though methodical, is streamlined when approached with clarity and the right documentation, setting a solid foundation for subsequent phases.

#4. Property Valuation & Surveyor Appointment

Once you decide to proceed, the next step involves a thorough property valuation. 

This is achieved by appointing a professional surveyor, typically designated by your provider.

A surveyor will provide:

• Objective Assessment: The surveyor's role is to evaluate your property objectively. Their assessment encompasses various facets, from the property's structural integrity and age to its overall condition and unique features.
• Market Dynamics: In addition to the physical attributes of the property, external elements, such as the property's geographical location, the desirability of the neighbourhood, and current housing market trends, play a role in its valuation.

#5. Receiving the Offer & Signing the Paperwork

Once the application has been thoroughly evaluated and the property has been valued, the next significant milestone in your journey is the receipt of the offer. 

This document is presented by the provider and serves as a formal proposition to the homeowner.

Reviewing the Offer

After a successful application, providers issue an offer outlining the terms, conditions, and the equity release amount.

The offer usually contains: 

• Terms of Agreement - It describes the specific conditions under which the equity release is proposed.
• Release Amount - The document states the exact sum of money that the provider is willing to release based on the home valuation and the homeowner's age.
• Interest Rates & Charges - The offer also breaks down the interest rates associated with the equity release and any other fees or charges.

Legal Representation

Engaging with a solicitor during the process is not just advisable but essential. 

It guarantees that the homeowner is legally protected and that the agreement is transparent, fair, and in line with UK regulations.

Purpose of Representation:

• Document Verification - Confirming the authenticity and accuracy of all paperwork.
• Legal Counselling - Providing the homeowner with guidance on the legal implications of the agreement.
• Liaison with Provider - Acting as a bridge between the homeowner and the provider, ensuring all concerns are addressed.

#6. Concluding the Process & Accessing Your Funds

Once all the necessary checks are conducted, documents are verified, and both parties agree, the process approaches completion.

• Accessing the Funds - Upon successfully concluding the process, the funds corresponding to the assessed property value are readied for release.
• Continued Residency - One of the main attractions of a lifetime mortgage equity release is the ability to access funds without relinquishing property ownership or residency.

Common Questions

In Conclusion

The equity release process offers a viable financial strategy for homeowners, typically over 55, looking to unlock wealth in their property.

The process, which can take 6 to 12 weeks, involves several steps, from application to property valuation and final legal checks. 

While there are calculator tools to provide estimates, seeking advice from a financial advisor is highly recommended to understand the equity release process fully.

Editorial Note: This content has been independently collected by the SovereignBoss team and is offered on a non-advised basis. SovereignBoss may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.