Equity release is a great way to free up some of the capital in your home to finance things like home improvements or major expenses. However, there are certain circumstances that can lead to your equity release request being declined. Not having enough capital in the property, the property not being suitable for the lender, and plans to invest in high-risk markets are all reasons why your request could be denied. In addition, lenders may reject applications due to flat roofs, proximity to commercial property, atypical construction, flood risk, single-layer construction, former local authority, clutter inside the house, asbestos, proximity to electricity, and spray foam under the roof.
If you have CCJ in your credit history, this could also lead to your equity release request being declined. Clutter in properties has become more common in recent years and this can also lead to a rejection. If your property is in a high-risk flood area, this could also be a reason for refusal. It is important to consult a specialist broker if you are in a flood zone. Different equity issuing firms and advisors have access to different lenders and some are restricted to certain lenders.
We have seen an increase in the number of properties with spray foam insulation and this can be a problem for customers who want to apply for equity release. A surveyor will inspect your property as part of the application process and this will determine the lender's offer. If you are entitled to apply for any benefits subject to resource verification (those that are based on your income and savings), your eligibility to apply for them could be affected if you apply for equity release. If you want to leave the full value of your property as an inheritance for your family, using an equity release plan will not be appropriate. When capital release providers decide how much money they can lend you, they will base their calculations on the age of the youngest applicant. Mortgage Advice Bureau Later Life has a free calculator that can provide you with a quote for the amount you could release.
The Equity Release Council is a group that offers voluntary membership to capital release advisory companies and life mortgage providers. An independent capital release specialist, such as Age Partnership, can advise you on which providers will consider releasing capital in properties with tenants or vacation homes.