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Do I Need to Have a Good Deposit History to Get an Equity Release Mortgage?

When it comes to getting an equity release mortgage, having a good deposit history is essential. How you must credit your mortgage deposit will depend on where it comes from. For traditional sources of deposit, such as personal savings, most lenders will want the money to accumulate in their bank account over a period of time, usually six months or more. Therefore, a vital stage of the mortgage application process is to provide proof of the origin of your deposit.

If your money comes from an unapproved source, lenders will quickly deny your request. You should be honest in your request from the start to ensure that there are no unexpected obstacles. You must demonstrate the disclosed source of the money in your mortgage deposit, and both lenders and lawyers will carry out rigorous checks to confirm that you have told the truth about the origins. Yes, if your capital has increased, you can use it as a deposit or even buy a house outright if you have enough. If you “downsize” and move to a lower-value home, you can turn your capital into cash if there is anything left over after you've bought your new home.

What is the meaning of home equity? Reasons why you could remortgage your home to free up capital Free up capital for retirementHow to remortgage to free up capital How much capital could I free up on my home? How long does it take to remortgage and release capital? Possible drawbacks of remortgaging to free up capital What are the alternatives to remortgaging to free up capital? Why remortgage through a mortgage broker? This is where you can benefit from talking to a mortgage broker who has specialized knowledge and access to the best remortgage deals that aren't available on the main street.

Capital release

is a financial product that mortgage providers offer homeowners over 55 years of age to receive a lump sum of money (or smaller, regular payments) in exchange for a repayment agreement. When you remortgage to release capital, you take out a new mortgage that is larger than the existing one, using the capital as a deposit. Net worth is the value of your home that you don't pay any mortgages on, including the deposit you originally deposited when you bought it. If you already own a large portion of a property, or if you have a second home whose value has increased, you may have enough capital to shell out a deposit for another property.

The release of capital allows owners to access money based on the value of their property without selling it. Homeowners over the age of 55 are eligible to release capital, and while some companies will want you to have paid your mortgage in full, not all providers do. This means that the capital you already have from any property you sold, or other existing savings, can be the deposit, and a lifetime mortgage covers the rest of the purchase price. This is not an exhaustive list and there may be other reasons why the capital release process takes longer. You can opt for capital release as a solution for receiving in-home care instead of going to a nursing home if that's a scenario you want to avoid. Before making any decision about a capital release plan, be sure to obtain independent legal advice from your lawyer.

This is the most common form of capital release and is based on an agreement under which you are provided with a sum of cash and the amount, plus interest, will be returned when you die or go to be treated. If you have a bad credit history, this should not jeopardize your chances of getting approved for capital release. This type of capital release involves selling part or all of your property to the supplier in exchange for a one-time payment. Only use a stock issuance advisor that is not related to the companies you are considering using and ensure that they are authorized and regulated by the Financial Conduct Authority (FCA).

Nigel Cook
Nigel Cook

Coffee expert. Hardcore social media fan. Wannabe tv junkie. Amateur web fanatic. Incurable internet scholar. Infuriatingly humble travel trailblazer.

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