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Do I Need a Good Property Valuation to Get an Equity Release Mortgage?

When you take out a lifetime mortgage or a mortgage with retirement interest only, you'll need one of our independent appraisers to value your property. However, there is an obvious, but crucial, difference between capital release products and more traditional forms of mortgages: credit life. Traditional mortgages are typically fixed between 10 and 25 years. Capital release, on the other hand, has no such limitations and lasts the life of borrowers.

We warn surveyors who value properties for these purposes to take fully into account the underlying concept of capital release and the risks that their valuation work is likely to entail. All lenders who release capital must complete an application form. Most require that you, the customer, sign the application form. However, some lenders only need your signature to accept the formal mortgage offer later with your lawyer.

Once the application form is completed, it can be sent to the lender. Different lenders have different ways of accepting applications. Some require forms to be published, others to be sent by email, and some have dedicated online portals for counselors to submit requests. Lenders usually give surveyors 48 hours to return their valuation report to you after they have visited your property.

Once the lender has received the valuation report from the surveyor, your request will be forwarded to the lender's insurers. Once the insurer is satisfied, a formal mortgage offer will be issued. You and your lawyer will each receive a separate copy of the mortgage offer. It generally takes 48 hours for the lender to issue the formal mortgage offer, once it has received the valuation report from the surveyor.

When considering freeing up the capital of your home, you may be concerned about receiving a valuation of your property that is unfair, that reflects its real value poorly, or that is biased in favor of the lender. The main disadvantage of capital release is that it doesn't pay you the full market value of your home. You will receive much less money than you would receive when selling the property on the open market, although, of course, in that situation you will still have to look for another place to live. In this case, a provider pays you a tax-free lump sum for a portion of your home below market value.

You can then live in the property (rent free) until you die. When you sell, profits are divided according to the percentage you own and the percentage that the lender owns. So if the value of your property increases significantly, so does the amount you receive. The capital release process can be divided into the following areas: If you want to accelerate the capital release process, it is all the more necessary to seek independent legal advice.

A professional advisor can help you check for errors in your application form, for example. Ultimately, they push the end date forward. The average request takes about 8 weeks to complete. However, some people complete it sooner, while others may have to wait a little longer to complete it, for example, if their lender detects an error in their application.

Capital release refers to a range of products that allow you to access the capital (cash) fixed in your home if you are older. You can take the money you release as a lump sum or in several smaller amounts or as a combination of both. This is a slightly different way to release funds without having to go to a specific capital release lender or be of a certain age. In the United Kingdom, equity release mortgages almost always include a “negative capital guarantee” (NNEG).

Then, you'll choose a provider and a capital release plan with help from your financial advisor or broker. When you are going to file a capital release request with a lender, you should wait about eight weeks until you receive your capital release funds. The time needed to release the capital in your home is 4-12 weeks depending on the plan you select and complexity of your case. For your initial capital release appointment, you should prepare essential documents and do some research on types of capital release if you qualify and amount of money you want to unlock.

I demonstrate that this generalized approach can underestimate capital release mortgage risks and exaggerate portfolio values. If you know approximate value of your property, you can use a capital release calculator to estimate amount of money you could release. However if you are seriously considering freeing up capital we strongly recommend that you seek professional legal advice before signing any agreement. The lawyer will then settle legal and advisory fees directly with proceeds from capital release and balance will be transferred to your account.

Choose form of capital release that's right for you and your family whether lifetime mortgage or home reversal plan is best for you will depend on wide range of circumstances such as how much you expect to leave your family in inheritance. Capital release is way for people over 55 years of age to release money that is currently being held on their property when seeking advice on capital release always ensure that company is authorized and regulated by financial conduct authority especially if paying for their advice. Check benefit situation: If receiving any benefits in addition to state pension check how they could be affected if used capital release Capital release credit checks can be expected but they are not important part of qualification criterion since capital release is secure loan Capital liberation is already important aspect of UK housing market even during periods of falling sales.

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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