The Equity release process from A to Z

The Road to Equity Release

Before you begin to look at Equity Release you need to fully understand the process that will be involved on the road to equity release. So here's our quick guide!

Choosing the right adviser

After you have chosen the right adviser you will have an initial meeting. This may be face to face at your home, or an office. It could also be on the telephone, or via the internet on video chat. The decision is yours although I would strongly recommend that you meet face to face.

Week 1 - The Initial Meeting

To the adviser this is known as the fact find meeting and is likely to take 1? to 2 hours. This is an opportunity for you to find out everything you need to know, and ask any questions that you may have. You will be encouraged to involve anyone that you want to support you in your decision. This could include your children or beneficiaries, friends, or even a legal adviser.

It is possible that you will have more than one meeting at this stage. Your adviser will not pressure you to move on to the next step until you are ready to do so.

The Fact Find

During this initial stage the adviser gets to know a lot about you and your circumstances. The information gathered will help to decide which is the most suitable option for you. Despite being called a FACT find, most of the things discussed are about how you feel about things rather than actual facts.

You will be asked about the following :

• Your basic details e.g. full names, date of birth etc. (Your maiden name too!)
• Details of income from pensions and any investments.
• Usual expenditure, including any debt payments e.g. credit cards, car loans etc.
• Property value
• Why you need the money and whether you need it as a lump sum or regular income
• Your health history
• Do you have a Will or Power of Attorney (and who are the beneficiaries)
• Your feelings regarding leaving an inheritance or long term care needs
• Value of any savings and investments you have
• For Leasehold properties, what are the terms (retirement homes are usually leasehold)
• If you have solar panels a copy of the agreement will be needed

These are just some of the areas that you will need to prepare for. You'll also need to have ID available to copy.

Getting to know each other

There are two very important aspects to this meeting. The first is for the adviser to assess if they can actually be beneficial to you. The second, and definitely most important, is for you to assess whether the adviser is right for you before you go any further. I always tell my clients that if they do not feel comfortable about anything, including me, to just say so. If we can't make them feel better I recommend they see another adviser and promise I won't be offended. After all, it is their money and future that will be affected.

Some advisers may charge a partial fee at this stage (Costs will be discussed at this stage)

Week 2 - The Next Step

We are now well on the road to Equity release as long as the client is happy to proceed. Your adviser will then go away to review everything and research the suitable products. They will consider all options available to you, not just equity release Lifetime mortgages.

I usually allow a week for this process, mainly to give the client time to think and raise any questions that have not been fully covered. Sometimes I find that children offer to lend them the funds they need and we simply close the file.

The adviser will (and must) prepare a recommendation (or "Suitability") report for you. This covers the things you discussed and explains their understanding of your needs. The adviser will highlight any other options that were considered before making the recommendation.

They will then explain the recommended product, why it was selected and how it meets those needs. All fees and charges will be fully explained within the report, as will any important terms and conditions.

Week 2 to 3 -Presentation

A further discussion then takes place, during which the recommendation report is gone through page by page. Ideally this should take place face to face again and your adviser will answer any queries you may have.

You will also be given the Key Features Illustration (KFI) from the lender. This is a long document that explains everything about the actual Equity Release Lifetime Mortgage. Your adviser will go through this with you, and focus on certain key areas.

In all cases they will spend some time explain how Early repayment Charges (ERC) are calculated. This can be complex with some products and needs to be explained so that you have an outline of how the product works.

Only if you are 100% happy at this point will your adviser proceed to the application.

The Application

You must be able to give the adviser your solicitors details before the application can be completed. Note that not all solicitors are accepted by the lender, as the legal process is slightly different to that for a normal mortgage. .

Most providers now have electronic application systems so you may find that your adviser has almost completed everything in advance. This obviously saves some time. You will usually be asked to sign the application declaration at this stage.

If you haven't already done so you will also be asked to sign the advisers client agreement, which confirms the fees that you have agreed to pay to them. I do not charge our fee at this point but will send our invoice to your solicitor for later payment. You may find that your adviser does similar or they may charge you at this point.

I will also ask my client to sign a declaration confirming that they have received and understood my recommendation report and Key features Illustration. You may also have to sign Data protection Privacy notices and similar documents.

Week 3 to 4 - Property Valuation

Most products will not ask you to pay a valuation fee, but if it is required they will ask you to pay now. Either way the valuation is usually instructed within 24 hours of the application. The independent surveyor will contact you and arrange to visit your home to inspect and value it in accordance with their guidelines. The valuation survey visit is usually arranged to take place within a week.

Once completed the surveyor will send a report to the lender the next day.

The Mortgage Offer

The lender checks the valuation report and assuming everything is okay they will make a formal offer of mortgage. This usually happens by the next day and means you have been accepted. A copy of the offer is sent to you and your solicitor to check over.

In some cases the valuation is lower than estimated by the client. The maximum amount of mortgage available may be reduced. You will be asked whether you wish to proceed on the lower amount.

Your solicitor now controls the rest of the process as they have to carry out the legal conveyancing.

8 to 10 weeks - Mortgage Completion

Your solicitor will move to completion and draws the funds from the lender. They then deduct any fees, including their own and your adviser fees. You will receive the balance of the funds.

If you have drawn the maximum Equity Release Lifetime mortgage possible your process ends here.

In cases where there is a drawdown facility this will be available to draw upon as and when required. A call to your adviser will be all that is needed to arrange things.

So that's it!

The long and winding road to Equity Release