10th October 2020
Can I Still Get Equity Release During the Lockdown?
The simple answer to this is yes. You are still able to do equity release during the lockdown, but some things have changed and there are important factors you will need to consider.
Normally, equity release customers must receive legal services, but that is not possible given the current situation. To overcome this, the Equity Release Council has published a temporary modification to the rules after a detailed consultation with its members and the industry.
It is important to maintain product safeguards while also protecting customers’ health. As such, a new process has been designed with input from expert legal advisers with experience in equity release across the UK. The Council’s standards board, along with independent consumers and regulatory experts also supported this process.
Once you decide that an Equity Release mortgage is the right kind of mortgage for you, your Financial Advisor will ask you to nominate a solicitor to act on your behalf.
There are a number of solicitors on the Equity Release Council, including Elizabeth Middleton Solicitors. Your Financial Advisor will ask you to give your chosen solicitor a call to instruct them. You will be asked to give your solicitor’s name to your Equity Release Mortgage Provider (for example, Legal and General, Nationwide or More2life)
After the Equity Release Mortgage Provider receives your solicitor’s information and is selected as your independent Legal Advisor, they will have their own team send over the documents which your solicitor will use to advise you. They include:
- The Mortgage Deed: Your solicitor will advise you about your obligations under the Mortgage Deed before you sign. Your solicitor will serve as the witness.
- Solicitor’s Certificate: Equity Release Mortgage Provider requires your solicitor to certify that they have seen you either in person or remotely. Your solicitor is able to give you legal advice in person, by telephone, video conferencing or post. It is important that you let your solicitor know which method you prefer as soon as possible so that they can make the necessary arrangements.
- Acceptance of Offer: The Equity Release Mortgage Provider will require you to sign an offer acceptance form to confirm that you agree to the offer that they made.
- Identification & Verification form: Your solicitor will be required to verify your identification. Please bring your passport or driving licence together with a utility bill that is less than three months old. They will certify them as proof that they have seen you either in person or by video conference for an ID check.
- Certificate of Comprehensive Building Insurance: Each Equity Release Mortgage Provider’s requirements are different. Nationwide requires their interest to be noted on your insurance policy before your solicitor sends all the above documentation back to the Mortgage Provider. Legal and General, on the other hand, requires you to sign a form confirming that you have adequate building insurance.
- Tenancy in Common: Let your solicitor know if you own your property as tenants in common. If you do not know, the Office copy entries that your solicitor obtains from the Land Registry will provide them with that information.
- Who will act for the Equity Release Mortgage Provider?
The Equity Release Mortgage Provider will choose their own Legal Advisor who will not be able to act for you as well. The reason they cannot act for you is that a conflict of interest would arise. Therefore, you as the borrower need your own Legal Advisor and they, as the Lender, require their own.
- Bank details: Your solicitor will need your bank details which they will take from you when I see you. For your security, never send your bank details by email.
- How long will the process take? It depends on how you own your property and your circumstances. If you are a sole owner and there are no restrictions on your title then the process is straight forward. It can take from about one week to two months to complete. The same will apply if you are married and have not divorced. It may take longer if you have had a separation because the Solicitors acting for the Equity Release Mortgage Provider may require a certificate to show that all the parties to the divorce received independent legal advice at the time. That may take a long time to resolve especially if both parties have moved on with their lives.
It will also take longer for the matter to complete if the property is Leasehold or if the Lease needs to be extended.
- Fees: Rates may vary, depending on the solicitor you choose. Some Equity Release Mortgage Providers such as Nationwide will contribute towards your legal fees. If they do not offer this facility, you are responsible for legal fees to your solicitor. At Elizabeth Middleton Solicitors, our current fees are £800 plus VAT for uncomplicated transactions. Transactions which are complicated, for example, those which include trusts, divorced clients, Leases, or Deed of Variation to extend the Leases, our fees are £1000 to £1200 plus VAT. This price is subject to change in the future.
When considering a home equity release, it is important that you balance your short-term and long-term financial needs. Home equity release lasts a lifetime, so you do not want to rush into a long-term decision just to service a temporary need. Expert legal advice will allow you to avoid potential issues, as a quality conveyancing solicitor can help you determine if equity release is right for you here and now.
This is where Elizabeth Middleton Solicitors can help. Our friendly team prides itself on answering all the questions you might have about equity release and helping you make the right decision for your future. We believe that everyone should be treated with respect, kindness, and receive personal service that meets their needs.
Contact us today.