Equity Release Help and FAQ’s
Explore our Equity Release Help and FAQs section for comprehensive information and expert guidance on lifetime mortgages. If you’re considering unlocking the value of your home to supplement your retirement income or to achieve other financial goals, this page addresses common questions and concerns regarding equity release.
Whether you’re curious about how equity release works, the potential benefits and risks, or the eligibility criteria, we’re here to provide clarity and support every step of the way. Our resources are designed to empower you with the knowledge you need to navigate this financial option confidently.
Equity release works by swapping a percentage of your property value for a lump-sum or in smaller amounts over a period of time. There are two ways to release equity, these are by way of a:
Lifetime mortgage: You borrow cash against the value of your home and pay interest on the loan. The loan is repaid when you die or sell your home.
Home reversion plan: You sell a percentage of your home to a provider in exchange for a lump sum or regular payments. You can continue to live in your home rent-free until you die or move out.
Impartial Financial Management only provides advice on Lifetime Mortgages.
Anyone who is a homeowner and over the age of 55 may be able to benefit from Equity Release. However, it is a complex area of advice and entering into such a commitment isn’t to be taken lightly and requires specialist advice.
Our award winning advisers have been giving advice on this subject for over 25 years and will be pleased to assess whether this is something that you can benefit from.
The amount you can release depends on a number of factors including your state of health, age and the value of your property. You will typically be able to release between 23.95% and 55% of the market value of your home. Perversely, unlike traditional mortgages the older you are the more you’ll be able to borrow.
The age of the youngest homeowner significantly impacts the maximum percentage you can take on an equity release plan. The age provides us with a Loan To Value (LTV), which is the maximum percentage the equity release lender could lend on a property.
It’s also worth noting that the higher the LTV that you borrow, the higher the rate will be.
There are a number of things. We always strongly recommend that you consult your wider family and look at what the alternatives are, including downsizing and whether you’re able to obtain the money from elsewhere.
Although raising money from your property is free of income tax it can potentially affect any means tested benefits you may be entitled to.
You should also consider whether you only borrow sufficient to cover your immediate needs. Most providers will allow you to have a “drawdown” facility or borrow more in the future although even if they provide this facility it can be withdrawn at any point in the future.
Applying for Equity Release is much like applying for any other type of mortgage. The first and most important step is to seek advice from a specialist adviser.
The application process itself can be much quicker. Once a application is submitted the provider will instruct a valuation, in most cases very soon after application and providing there are no issues a offer will be issued once the valuation has been completed. In most cases valuations are paid for by the provider.
It’s important you also appoint a solicitor, ideally one that is suitably experienced with Equity Release (not all are!) and ideally one that is also a member of the Equity Release Council. Unlike traditional mortgages you should expect to see your solicitor face to face. If you do need help with this we’ll be happy to make recommendations.
Finally and once the legal work has been completed funds will be released. Expect the process to normally take between 6 – 8 weeks although this can be much longer if there are complications.
Yes! One of the Equity Release Council standards for all providers offering Equity Release is that you will have the right to port (transfer) your mortgage to a new property. The only caveat to this is that the property must match the lenders criteria.
The criteria for property can vary considerably between lenders but your adviser can guide you about this as part of your discussions and when deciding which provider and product to recommend.
Property prices are constantly increasing or decreasing in value and consequently, just like any other mortgage, so will your remaining equity in the property.
However it’s worth noting that products which fully meet the Equity Release Council’s Product Standards are required to feature a “no negative equity guarantee”. Put simply, this guarantee means that you, or more specifically, your estate will never owe more than the property is worth when it is sold.
