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Equity Release Solicitors – Best Options & Tips

Equity Release Solicitors

For free and impartial money advice and guidance, visit MoneyHelper, to help you make the most of your money.

Equity release solicitors are an integral part of the equity release process and you will need to pay for their services. 

We discuss the key details when choosing an equity release solicitor before providing you with good options whether you are based in England, Wales, Scotland or Northern Ireland. Read on for help looking for professional equity release legal advice. 

What is equity release?

Senior homeowners can use equity release to receive a tax-free cash lump sum that does not have to be repaid through monthly repayments. The money is only repaid after they die from the sale of their home from their estate, or through an earlier property sale if they move into residential care. 

With equity release, you could get money up to 80% of the value of your property to be used for a more comfortable retirement. 

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Who qualifies for equity release?

To qualify for equity release you must be at least 55 years old and own a home outright with no residential mortgage left to pay. That property must be your main residence and not a rental investment property. The home must meet a minimum valuation too, which could be around £75,000. 

There might be an older age restriction on applying, but that is usually set at around 85 years old.

What is equity release used for?

Equity release can be used for any purpose or a combination of means as desired by the homeowner(s). Many people use their lump sum payment to help fund the cost of private healthcare, to pay for frequent holidays and trips and to complete home renovations. In a nutshell, the money is used to improve the quality of life in later life and throughout retirement. 

Others may give some or all of their loan to family as a type of early inheritance

Does it cost to release equity?

There are a number of costs to consider when using an equity release plan, such as:

  1. Financial adviser costs
  2. Legal advice fees
  3. Admin and application costs
  4. Loan set-up fees

You can expect to pay at least £2,000 to set up an equity release plan. Some lenders, such as Nationwide Bank at the time of writing, offer cashback to help you pay for these services. 

What is the catch with equity release?

If you understand how your planned equity release product works in full, there should be no ‘catch’ with equity release. But in general, the catch of equity release is said to be its overall cost. Although there are no monthly repayments, when the debt does need to be repaid, the debt will usually be considerably larger than the loan taken out, sometimes twice or even three times as big. 

If you pay this back after death it may not be a concern how much it costs, unless you plan on giving your estate to children, which will be much less valuable after equity release. 

The primary equity release product – lifetime mortgages

The most popular way of doing equity release is through a lifetime mortgage. They work by charging interest on the loan amount so the total debt keeps increasing over time. The longer you live or the longer it takes for you to move into long-term care, the bigger the debt grows unless you make voluntary interest payments each month. 

Lifetime mortgage example

Lifetime mortgages will let the homeowner take up to 60% of their equity as a lump sum or drawdown loan, based on age and property details. If you take out £65,000 of a £195,000 property (33% home equity) with a rolling interest rate of 6.4%, you would owe near enough £137,000 after 12 years. 

What about a home reversion plan?

Home reversion plans are the second and only other method of equity release. They also don’t have to be repaid until after death or moving into long-term care. But they work differently to a lifetime mortgage. 

With a home reversion plan, the lender and the homeowner agree on a loan amount up to a percentage of their equity, but the homeowner simultaneously agrees to give the lender a much greater percentage of the future property sale. 

For example, a loan worth 20% of the home equity can cost 60%+ of the future sale proceeds. 

Do I need financial advice before getting a lifetime mortgage?

You need to receive financial advice before considering any lifetime mortgages and making an application. The financial advice you receive will explain the full costs and implications of taking out an equity release plan, and also to explore alternative better solutions based on your personal circumstances. 

Many financial advisers can continue to offer a broker service by searching the market for possible lifetime mortgages you could apply for. Some advisers work directly for lenders and will only promote their equity release products. 

How much do equity release advisers charge?

Equity release advisers either charge a fixed fee or a percentage of the loan you take out. You might not be charged anything or charged a smaller fee if you decide not to use equity release. 

If you are charged a fixed fee, the costs can be anywhere between £900 and £1,200 on average. And if you are charged a percentage based on the loan amount, you can expect to pay between 1% and 5% of your loan to the adviser. For example, taking out a £50,000 loan could cost you between £500 and £2,500 in advice. 

So in some situations, it is better to seek a financial adviser charging a fixed fee – and in others, it is not. 

Do I need a solicitor for equity release?

It is important that the homeowner receives legal advice and uses a solicitor for parts of the equity release process. Financial advisers can often help you pick a solicitor that meets the requirement for the job. And we have listed some of the most suitable equity release law firms later in this guide. 

Solicitors specialising in equity release

Solicitors often specialise in certain areas, and so it is highly recommended that any solicitor you engage with has experience working on equity release cases. Many firms will advertise that they do have experience in this area on their website. 

But there is another way to ensure your legal team are equity release specialists… 

Consider legal advice from Equity Release Council solicitors

The Equity Release Council is a governing body within the industry that offers voluntary membership to any company operating in the sector, including financial advisers, lawyers and lenders themselves. If a company is a member of the council, you can guarantee that they are authorised and regulated by the Financial Conduct Authority and that they work frequently in the industry. 

As part of their membership, they must commit to an extensive list of rules and guidelines designed to improve service standards and to offer additional protection to homeowners. 

Do you have to have a solicitor for equity release?

One of the rules set down by the Equity Release Council states that every senior homeowner must receive equity release legal advice before making an application and during the process. This is not only to represent them through the various stages of the process and make the required checks, but also to prevent them from following through on poor financial advice they may have received prior to the legal advice. 

As part of the council’s rule, the solicitors that you receive advice from must be operating with a minimum of four lawyers. This could mean your local and smaller law firm will not be applicable to the process. 

How much are equity release solicitor fees?

The best equity release solicitors will only charge fees if you decide to go ahead and apply for an equity release plan. As it is the solicitors which will influence your decision to either apply or not, the need to find honest and professional equity release solicitors is paramount. Of course, some solicitors may charge a (reduced) fee even if you do not apply. 

On average, equity release solicitors fees are around £1,000 including VAT. Some solicitors will not charge a fixed fee like this and will want a percentage of the loan you receive, ranging from 1% to 4% on average, which may or may not be cheaper than the fixed fee depending on the size of the loan you need. 

Thus, the pricing structure should be meticulously considered before choosing a law firm.  

Equity release solicitors near me

If you require equity release solicitors, it is normal to search for your nearest options for convenience. And probably to access face-to-face legal advice rather than only over the phone. 

To help you out, our team has researched some of the leading equity release solicitors across the UK. Always do your one research to find the right legal advice for you, but you may want to consider these options too. 

Equity release solicitors in England and Wales

One of the largest equity release solicitor companies in the UK is Ashfords. They are based in Exeter and specialise in the area of equity release, serving thousands of senior homeowners every year. Although their head office is in Exter, they have a number of other offices scattered across the south of England. 

One of the benefits of using Ashfords equity release legal advice is that they do not charge you anything if you decide to not take out an equity release plan. And if you do decide equity release is the right step for you, they charge a fixed fee rather than a percentage of the loan you take out, which can be pricey if you are releasing a lot of equity as a loan. 

Equity release solicitors in Scotland

One of the leading equity release solicitors in Scotland is Caesar and Howie, a legal team and estate agency that has been in operation since 1793. Although they do not work exclusively in the equity release sector, they do specialise in the area with scores of satisfied equity release clients every year. 

Caesar and Howie are members of the Equity Release Council. 

Equity release solicitors in Northern Ireland

If you require equity release solicitors in Northern Ireland, you may want to consider Donnelly & Kinder. This legal advice company is run by a successful team of female equity release experts based just outside of Belfast. 

What documents do you need for equity release?

To go through the equity release application process, you will need to supply identification documents and documentation relating to your property. Equity release solicitors can help with the bureaucracy of the application. 

Why would I be refused equity release?

Equity release companies can still refuse your application for a number of reasons. Some of the common reasons that applications are refused are:

  1. You have CCJs or a charging order on your property for unpaid debts
  2. Your property does not meet building regulations
  3. Your property has been built with too many dangerous materials, such as having asbestos in the structure
  4. Your property is located in an area that is prone to significant flooding which could significantly damage the property
  5. Problems with the property’s roof and design

What is a drawdown equity release?

Drawdown equity release works in the same way as described throughout this post, but instead of receiving a lump-sum payment, the homeowner receives a drawdown facility. This means they can access regular payments of their choosing rather than all the money at once. 

Drawdown equity release can be beneficial if you do not plan on spending all your loan at once because it could reduce the interest charged each month and maintain eligibility for means-tested state benefits. This is best discussed with your equity release adviser. 

Is equity release worthwhile?

It can be worthwhile to use a lifetime mortgage in some situations, but the only way to know if it makes financial and legal sense is to engage with advisers and solicitors. Those with children can find it a much more difficult decision because you will not pass on the family home to them. And as such, there is more than a financial element to the decision to use equity release or not.  

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