Equity release is the equivalent of a mortgage and, as such, you’re going to need to employ the services of a solicitor. There are various fees to pay too as part of the whole process.
Do I Need a Solicitor When Organising an Equity Release Scheme?
When applying for an equity release lifetime mortgage, both you and the lender will need a solicitor. You’ll need to pay fees to the lender and to your own solicitor as part of the application process.
When applying for an equity release lifetime mortgage, both you and the lender will need a solicitor. You’ll need to pay fees to the lender and to your own solicitor.
Continue reading to understand the benefits of using a solicitor
- – The reasons to release Equity from home
- – Equity Release while being on state benefits
- – Equity Release schemes and your pension
- – Equity Release interest rates explained
We update all our guides regularly. If you are researching Equity Release and we haven’t got an exact guide that helps you, keep coming back as we update daily.
Equity Release: Who Needs a Solicitor?
When you apply for equity release, you’ll need a solicitor (find a solicitor on the solicitor register). Your lender will also use a solicitor. Your solicitor’s job is to make sure you fully understand the agreement that you’re signing up for, any legal obligations you have, and that you’re clear on the risks and rewards.
The lender’s solicitor has an equally important role. They must make sure that the lender has the first legal charge on your house when the loan is taken out. Without their work, the lender won’t be guaranteed to recover their money, and so they won’t agree to your equity release. They’ll be a conveyancing lawyer as it is essentially the same principles as selling a house on the free market.
According to the Equity Release Council 37,000+ people used Equity Release schemes in 2018, releasing over £3.06bn from their properties.
Equity Release: What Fees Are Involved?
There are a number of fees involved, due to the various parties, as the process of equity release unfolds. Firstly, your house will be valued by the lender, using an independent surveyor, and you’ll be expected to cover this cost. Depending on the lender and your location/surrounding properties, the survey may need to be more in-depth.
Then there may be arrangement fees, charged by the lender just for setting up the scheme. It’ll be spelt out in your offer and your solicitor will make sure you’re clear on them. The charges could be a set figure, e.g. £1,000, or they might be a percentage of the final loan value. You can pay them off upfront or add them to the loan, but do that and you’ll accrue interest.
Then there are the fees your own solicitor will charge. You should make sure you hire a specialist, which we’ll cover later, even if they charge more.
Finally, the broker who set you up with the lender will charge a consultation fee. These fees can vary, and will again either be a flat fee or a percentage of your loan amount, often around 1.9%.
Who Are the Equity Release Council?
The Equity Release Council is a regulated body that monitors registered solicitors and lenders. It’s best that you choose an Equity Release Council solicitor, as that way you know they’re following the legal requirements and can give you the most up-to-date and correct advice.
You can find an Equity Release Council on their website.
Your solicitor will provide independent advice, but that’s where we can help too. We’ve got further guides on equity release that tell you everything from interest rates, tax implications and more.
Quick Equity Release FAQs
Home reversion plans are, in essence, a means of selling a share in your property to an investor, in exchange for payment. There are no repayments, with the investor receiving their share of proceeds when the property is eventually sold.
The Equity Release Council is the industry body which represents equity release providers, qualified financial advisers, solicitors and intermediaries. Equity release is a growing sector, especially for older homeowners who may have limited access to finance.
You need to be at least 55 years old to apply for equity release in the UK. If you are planning to make a joint application, this applies to both of you.
Equity release drawdown works by giving you the value of your loan as a pot that you can make withdrawals from. You’ll only pay interest on the money you decide to withdraw.
How Can Money Savings Advice Help You With Releasing Equity?
Here at Money Savings Advice, we have partnered with some of the UK’s leading Equity Release brokers. They have already helped thousands of people get the best Equity Release deal and they can do the same for you.
Choosing an independent adviser means they won’t recommend a scheme unless they are sure it is in your best interests. Their advice is also regulated by the FCA, which gives you an additional layer of protection.
If you would like to speak to one of these brokers who can provide you with a ‘whole market quote’ then click on the below and answer the very simple questions.