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Frequently Asked Questions

We have answered some of the most commonly asked questions about equity release on this page, but if you have any other questions or require further information, please don't hesitate to call us.

How much does it cost? How is a lifetime mortgage paid off? What if I want to move? What if my circumstances change? What if I don’t want equity release anymore? Would I still be able to leave an inheritance to my family? Would I still own my home? Who would be responsible for maintaining my home? What is a no negative equity guarantee

How much does it cost?

There are four main costs associated with setting up any equity release plan.

• Survey Fee:  This is payable at the start when you submit your application. The amount usually depends on the estimated value of your property.
• Application Fee:  This is payable directly to the provider when your loan application completes. This can either be paid from the funds released or added to your loan. This fee is typically £595.
• Legal Fee:  All Safe Home Income Plan (SHIP) members insist that you receive independent legal advice from a solicitor. Your solicitor should offer a fixed fee for this service of between £400 and £500.
• Advice Fee:  This is the fee equityCare charge for assessing your suitability for equity release, making a recommendation and handling your application to completion. Our advice fee is fixed at £500 and is only payable when the funds are released. If you do not proceed, no advice fee is payable. equityCare will also retain any commission paid by the provider for arranging the plan.

How is a lifetime mortgage paid off?

The outstanding amount is repaid on death (with a couple, on the death of the last survivor), or following a move into permanent long term care.

What if I want to move?

All SHIP approved plans are portable; this means they can be transferred to a new property, subject to the approval of the plan provider.

What if my circumstances change?

If you take out equity release while you are single and then, at a later date, want to share your home with someone, you may be able to transfer your plan into joint names (if the second person meets the minimum age criteria). There may be a charge for the transfer.

If you are not able to transfer the plan into joint names, then you should understand that, if you were to die or move, the second person would not be able to stay in the property.

What if I don’t want equity release anymore?

Home Reversion Plan

With a Home Reversion Plan, it may be that you have to sell your property unless you can afford to purchase back the share of your property that you sold. Please remember that this will be the market value of the share that you sold at the time you are trying to purchase it back. We cannot predict the amount that your property will be worth as property prices could be higher or lower than they are today.

If you are intending to repay your equity release plan at some point, we recommend that you tell your adviser at the outset as this information will help them to select the type of plan that is suitable for your needs.

Lifetime Mortgage / Interest Only Lifetime Mortgage

If you decide that you are now in a position where you do not want your lifetime mortgage any more, you may be liable for extra charges, known as Early Redemption Charges, which can be expensive. This is because most equity release plans are intended as a long term way of releasing money.

If you are intending to repay your equity release plan at some point, we recommend that you tell your adviser at the outset as there are products available with specific periods of early repayment penalties, such as five or ten years, and even some products which carry no such penalties.

Would I still be able to leave an inheritance to my family?

Home Reversion Plan

If you sell your entire home then there would be no cash due from the eventual sale of the property. However, if you only sell part of your property then the value of the share you retained could be used to provide an inheritance.

As we cannot predict the future value of your property, we also cannot predict the amount that could be available as an inheritance. Property prices could be higher or lower than they are today when the property is eventually sold.

Lifetime Mortgage / Interest Only Lifetime Mortgage

The amount of inheritance available will be the difference between the proceeds from the sale of the house and the amount outstanding on the loan when it is redeemed.

If your plan has a lifetime fixed interest rate, you have the certainty of knowing exactly what your future debt will be. What we cannot predict is the future value of your property as property prices could be higher or lower than they are today when the property is eventually sold. Therefore we cannot predict what inheritance will be available.

Would I still own my home?

Home Reversion Plan

The deeds and therefore ownership of the property would be transferred to the home reversion provider. You would retain a beneficial interest in any part of the property not sold to the home reversion company.

Lifetime Mortgage / Interest Only Lifetime Mortgage

You maintain 100% ownership of your property.

Who would be responsible for maintaining my home?

With both home reversion plans and lifetime mortgages you are responsible for the maintenance of your property to a reasonable standard.

What is a no negative equity guarantee?

If this guarantee is given by an equity release provider, it means customers will never owe more than the value of their home and no debt will ever be left to the estate. This guarantee will be given if the equity release provider is a member of SHIP.

Equity release may involve either a lifetime mortgage or home reversion plan. To understand the features and risks, ask for a personalised illustration.