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How does equity release work?

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Checked for accuracy and updated on 27 June 2023

Equity release allows homeowners over the age of 55 to unlock the value of their property without the need to sell or downsize.

In principle, equity release schemes come in two formats:

Lifetime mortgages are a type of mortgage secured on your property which can be your main residence, second home or even a holiday home.

Homeowners continue to own their home and can choose either a single cash lump sum, income or take smaller chunks of money over time – known as drawdown. All the money released is tax-free and the homeowners get to stay in their property until they die or go into long-term care.

The money raised from any equity release scheme can be used for any legal purpose: from home improvements to clearing existing debts or mortgages.

And if it’s just some extra funds needed to buy a new car or a once-in-a-lifetime trip, that’s fine too – we never tell you what to do with your money.

Or

Home reversion plans allow you sell a percentage of the value of your property in return for a tax-free cash lump sum, or series of capital amounts. The home reversion provider offers a lifetime tenancy to the homeowners, enabling them to live rent free in their home for the rest of their lives.

Although home reversion has a minor role in today's equity release market, they still provide peace of mind as a way of releasing tax-free cash AND guaranteeing an inheritance for your beneficiaries.

What’s the equity release application process?

At Equity Release Supermarket, we provide a transparent and customised service which sees our experienced and friendly advisers guide you through the whole application process. From initial research to the successful release of funds at completion, you can rely on our team to explain everything in a language that’s easy to understand.

Here is a guide to explain the equity release application process:

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1 Advice and recommendation

The first part in the equity release process is to have a free initial consultation with one of our advisers. They will provide you with a personalised suitability report based on your circumstances and products currently available in the market.

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2 Application

Following acceptance of our recommendation, your equity release adviser will complete an application form, collecting supporting documentation and identification. Our new business team will then forward your file onto the equity release provider.

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3 Valuation report

Upon receipt of your application, the lender will instruct a local independent surveyor to contact you and arrange a mutually convenient valuation of your property. The surveyor will conduct a market appraisal, advising its current value and condition for security purposes. The outcome of this report will determine how much equity can be released.

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4 Conveyancing and legal

Your appointed equity release solicitor will be responsible for dealing with the legal process. They will liaise with the lenders’ solicitor and fill out an initial questionnaire about you and your property. You will then receive an offer from the lender, along with a Solicitor's Certificate.

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5 Offer made

Once the lender deems the surveyor’s valuation report satisfactory, you will be sent an equity release offer. This confirms the terms and conditions of the mortgage, including the rate, charges and amount borrowed. The original offer is sent to your solicitor, requiring a signature in the presence of your solicitor during a face-to-face meeting.

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6 Completion

Finally, when the lender’s solicitors have completed their final checks of all the legal paperwork, they will set a completion date. The funds released are sent to your solicitor initially with any charges deducted. Dependent upon your preferences, the net amount will then be forwarded to your nominated bank account or posted via cheque.

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7 Enjoy the proceeds!

With the funds released, you are now free to spend the equity release proceeds in whatever way you wish. Equity Release Supermarket prides itself on service, so we will always try to check-in on an annual basis to make sure the plan remains competitive.

What our happy customers have to say about our equity release advisers

Hannah Boxshall was excellent. She took us through everything, was never pushy and was an absolute delight to deal with. An... READ MORE

Mr & Mrs B - Tadley, Hampshire

Sara has recently helped us with an equity release on my mum’s property. Not only was she professional & thorough, but... READ MORE

Mrs K - Brentwood, Essex

Guy was very thorough. He explained everything fully. He's friendly and very easy to talk to. I would definitely recommend.... READ MORE

Mrs E - Shrewsbury

Andrew was an excellent adviser, extremely patient and willing to visit on more than one occasion.

Mrs B - Plymouth, Devon

Despite the limitations imposed by Coronovirus, I was extremely pleased by the highly professional approach adopted by all.... READ MORE

Mr W - Knebworth, Hertfordshire

All options very well explained, and Adam was very patient.

Mr & Mrs B - Hailsham, East Sussex

We both found the experience straight forward thanks to the detailed advice given by Gareth and the rest of the people assigned... READ MORE

Mr & Mrs T - Hull, Humberside

Gary was very clear with his explanations and helped us understand all our options. Everyone involved was very helpful and... READ MORE

Mr and Mrs R - Canterbury

Sue appreciated that we had carried out extensive research ourselves so was able to aim our discussions at the appropriate... READ MORE

Mr & Mrs H - Morecambe, Lancashire

Daniel, thank you so much for making this whole journey a pleasure. You were so understanding and thoughtful throughout and... READ MORE

Mr & Mrs N - Rhyl, North Wales

Superb advice right from the start. Our wishes & concerns were taken fully into account when selecting the best product.... READ MORE

Mr & Mrs P - Fareham, Hampshire

Very happy with service and face to face contact with Michael Filewood and being informed through process with Michael &... READ MORE

Mr W - York

All very helpful. What I really like is that they always respond quickly to any question you may have and nothing is too... READ MORE

Miss K - Liskeard, Cornwall

My telephone call with my advisor Rebecca was very informative. She was friendly, professional and laid everything out to... READ MORE

Ms B - Fife

What was a major decision for us to proceed was made much easier by the professionalism & quality advice provided by everyone... READ MORE

Mr & Mrs K - Harrogate, North Yorkshire

This service was fantastic. We were having problems getting equity release due to our solar panels. Mark sorted it out exteremely... READ MORE

Mr T - Nottingham

Very clear & concise information provided which allowed me to make a fully informed choice of loan, which met with my current... READ MORE

Ms J - Southampton, Hampshire

A clear straightforward and quick process knowing exactly what costs were involved through set fees rather than %. Our thanks... READ MORE

Ms W - Irvine, North Ayrshire

Anna was empathetic to our requirements and her advice and recommendations helped to clarify our decision.

Mr C - Rochdale

The whole process was quick & much easier than doing a traditional mortgage. Excellent service & highly recommended.

Mr E - Stratford Upon Avon

From first to last we were very impressed by your service & pleasantly surprised by how quick completion was, considering... READ MORE

Mr S - Hastings, East Sussex

‘John’s patience and clear explanations provided us with the reassurance that we had made the right decisions’

Mr & Mrs Barrett - East Sussex

I want to say thanks for the excellent service I received, Jo gave me help and advice with a smile.

Mrs F - Camberley, Surrey

A huge thank you to Paul and Collete for their hard work, patience, and regular contact during the process of obtaining equity... READ MORE

Mr & Mrs S - Hull

How long does the equity release application process take?

A lifetime mortgage scheme usually takes somewhere between 4 to 6 weeks to complete, while a home reversion plan is more like 8 to 10 weeks, assuming the title on the house is clear. How long this takes will also depend largely on how efficient and experienced your solicitor is.

Applying for equity release involves legal work, which should be handled by a solicitor with expertise in equity release. This can help to avoid any potential delays in your application.

Equity Release Supermarket can provide a panel of qualified equity release solicitors to choose from, who can handle your application. All these solicitors offer a home visit if required and a competitive pricing structure, backed up by a 'no completion, no fee' guarantee.

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