There are a few really common questions we receive when homeowners are starting to seriously contemplate releasing equity from their homes. Usually at least one or two of those questions relate back to the costs associated with an equity release plan. Of course, if you are considering a plan, you want to know what fees you can be expected to incur.
The charges you will likely pay will differ based on a few factors. The first is who you choose to use as your financial adviser. The second is the lender you choose and the third is your solicitor.
Find each plan’s set-up costs
Our free client-facing smartER research tool will firstly determine whether you’re eligible for equity release before displaying the products available to you. It will include their rates and maximum releases specific to your personal criteria. Furthermore, within each plan’s details will be the set-up costs involved with each plan and lender.
When choosing an equity release plan, you want to make sure that you get the most knowledgeable advice and guidance as you can. It is a very big decision and not one you want to take lightly. After all, it not only impacts you and the rest of your life but will impact the lives of your loved ones as well. With that said, the costs for financial advice varies quite substantially. Some advisers will even charge you based on the amount you are borrowing.
Other advisers will only charge you a flat fee. Our team at How to Release Equity believes in the latter. It does not cost us more to research your plan simply because you are borrowing more money. So, it wouldn’t seem right to charge you more based on the fact that you are borrowing more. Other brokers would charge you upwards of 2% of the amount of equity you release. Find your local adviser today.
There are lender’s fees associated with an equity release plan. To start, you may get charged an application fee. This fee usually pays for the legal costs and set-up required to start a lifetime mortgage. The amount of the fee varies by lender. Some charge nothing and others will charge all the way up to £995. You have the option to either pay that fee yourself or you can have it added to your loan balance. Adding any amount to your loan will increase the amount of interest you accrue so that is something to always keep in mind.
There are special offers that run from time to time since lenders are always in competition with each other for new business. So, if you keep your eyes out, you can sometimes get a deal on fees.
Another fee you will incur is the property valuation fee. This enables the lender to get an accurate property value for your home so that they know how much you can borrow. It also ensures that your property is in good condition. If it is in poor condition, the lender can require you to make repairs before the loan is approved or they can decline you altogether. The fee you would be charged is based off of the estimated value of your property.
According to the Equity Release Council, your solicitor must be independent to the lender’s solicitor. You also must have a minimum of one in-person meeting with your solicitor. We can give you a recommendation on a solicitor that will move the process along quicker for you, getting you your cash faster.