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Mark Gregory, Founder and CEO at Equity Release Supermarket
www.equityreleasesupermarket.com
Tel: 0800 678 5955
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Question
Age gap: Are we eligible for equity release?
I am 56 and my wife is 51 and we own our house outright. Due to the coronavirus I am working at 80% of my salary and my wife has no work as she is self-employed, and we are struggling financially. Would we able to take out an equity release plan given that I am 56. I believe the minimum age is 55 but is that for one or both owners of the house?
Answer
Yes, you are correct. The minimum age for a lifetime mortgage is usually 55 for all property owners. However, if one of you is over 55, several lenders would consider an equity release application, in a single name, albeit this should only be considered, and we would only recommend this course of action under exceptional circumstances.
Given your ages, we would firstly consider other forms of lending such as short-term unsecured borrowing to help you through the current situation, residential mortgages, and later life, interest only mortgages, which are longer-term commitments. An Equity Release Supermarket specialist adviser would analyse and assess your current situation to see what options are potentially available, then make a recommendation.
Regarding equity release, lenders apply different criteria if a partner is under the age of 55; amongst those that will consider you, they will insist that the spouse under 55 comes off the property deeds, if she is already on them.
Your wife would also need to take independent legal advice and sign an occupancy waiver as part of the process for this, which will incur additional legal costs.
At Equity Release Supermarket, we would only recommend this course of action under exceptional circumstances, as your wife could end up homeless if you were to die or move into long term care. This is because your property may have to be sold to repay the lender if you died, or you had to pay for residential care.
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Question
How long does it take to get equity release?
How long does it take to get equity release from getting advice to getting the money? Is it longer now that we have this coronavirus to deal with?
Answer
It typically takes just 4-6 weeks to receive your money when you take out equity release, but we have known advisers at Equity Release Supermarket have cases completed in as little as 11 working days in the current CV-19 crisis!
Timescales are dependent upon the legal process including whether the title to your home is registered or unregistered, freehold or leasehold, type of property, the lender recommended and your solicitor selected to handle your legal work. As you can see there are many variables, however by discussing your current circumstances with one of our advisers, they could provide a good estimate based on their experience of such situations.
Your adviser at Equity Release Supermarket will keep you up to speed on the progress of your application and you can also use our exclusive case tracking facility on our website which you can access via our secure portal. This enables you to track the progress of your application online, whenever you want to.
Here at Equity Release Supermarket, every client will not only have an adviser to help them, but a dedicated case coordinator to liaise with all parties involved in the application process – from lenders & their own solicitors to surveyors and estate agents where appropriate.
For a period of time, lenders amended their terms and conditions during lockdown and also valuations were typically conducted via ‘desktop valuations’ as surveyors were unable to make home visits.
At the time of writing, many lenders are slowly reverting back to engaging with surveyors to make home visits where it is safe to do so, which should result in pre-Covid terms and conditions returning. In our experience, even during lockdown, the timescales to progress and complete cases remained very similar.
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Question
Can I take out equity release on a property I own abroad?
I have a house in Spain, which I inherited 10 years ago and own outright. I was living in it until last year but have come back to the UK to look after my elderly mother who I have moved in with. The Spanish house was being let out as a holiday home but due to the coronavirus I now have no income from it. Would I be able to take out equity release on this property? It is the only house I own.
Answer
Equity release lenders will only consider properties that are within the UK and so unfortunately you won’t be able to take out equity release on your property in Spain.
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Question
Is it possible to raise money to move into a retirement home?
My mother wants to move into a retirement home, but if she sold her flat she still would not have enough money to buy the new home. She would need another £50,000 to buy it. Can she take out a mortgage for that amount or is there an equity release route? She is 89 years old. Is her age against her?
Answer
The good news is that yes, this is an option for your mother as she could release equity on the retirement property she wants to buy and use that money towards the purchase of her retirement home. The method works in the same way a residential mortgage, where the new lifetime mortgage makes up the shortfall for the house purchase.
Obviously, I don’t know what the purchase price of the retirement home is, but if it is valued at £200,000 for example, given your mother’s age, she could release circa £100,000 (or about 50% of the value), so there is plenty of equity within it to provide the £50,000 she needs. On the whole, the less she borrows, the better the interest rates become.
It is also possible to time the sale of her flat with the purchase of the retirement home. The lifetime mortgage application is managed so that on completion, her solicitor takes the sale proceeds of her flat, adds them to the new lifetime mortgage, enabling the purchase of the retirement home. Therefore, the whole process can be seamless and as stress free as possible for your mother.
That said, some lenders do have terms and conditions in place for releasing equity on retirement homes and will want to be satisfied that the retirement home meets their lending criteria in respects such as the term of the lease, service charges etc.
I recommend that as your next step, you speak to an adviser at Equity Release Supermarket who will be able to discuss the situation with you in more detail.
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