30 June 2021

Equity release - the lifetime mortgage application process, explained

5 min read


If you're thinking about releasing equity from your home or purchasing a home with a lifetime mortgage, you might be surprised to learn that the application process can be relatively straightforward.

A lifetime mortgage is a long term loan that allows you to release some of the value of your property in a tax-free cash lump sum. In some cases, a lifetime mortgage can also be used to purchase a new home.


What should you consider when applying for a lifetime mortgage?

The equity release process is regulated by the Financial Conduct Authority (FCA). As such, it is an FCA requirement that you speak with a fully qualified equity release adviser, who will be able to explain more about the product and help you to understand if it would be the right choice for you and your circumstances.

They will also help you to understand all the features and risks. For example, it could reduce the value of your estate and entitlement to means-tested benefits.

If, after meeting with an adviser, you choose to make an application, they will handle it on your behalf.   

Making a lifetime mortgage application

When you’ve met with your equity release adviser and discussed your options, the next steps to releasing equity from your home or purchasing your new home should be as follows:

  • You submit your application to the chosen lender
  • The lender that your application is with will then arrange for a surveyor to carry out a valuation on the property. In some cases they will be able to arrange a desktop valuation, in which case they will not need to visit the property. If this can not be done, then a physical valuation will need to be arranged
  • The lender will receive the results of the survey and tell your adviser about them. Depending on the results of the survey, your adviser will either:

Confirm that the lender can offer you the amount you need

Arrange for any additional reports on the property that might be needed

Or discuss with you a new release amount based on the property valuation.

  • After you receive the valuation and your adviser confirms that the lender is happy with the report, you will receive a formal lifetime mortgage offer. At this stage, the lender will also send details of the offer to your chosen solicitor. 
  • At this point, your solicitor will arrange to meet with you. At this meeting, they will discuss the details of the offer with you and make sure that all the implications of your releasing equity with a lifetime mortgage are understood. Should you be happy to proceed, you can sign the mortgage deed
  • Your solicitor will take over from here, sending the signed mortgage deed along with the necessary paperwork to your lender’s solicitors. They will give this a final check before completing your lifetime mortgage plan
  • At this stage, the lender will transfer your money to your solicitor. If you have an outstanding mortgage at this time and have chosen to use some of the money to repay it, this will be done first before any money is released to you. There may also be reductions for legal and advice fees, but your adviser should disclose this to you before completion. Due to this, you should always make sure that you don’t commit to any spending until you actually receive your funds
  • Finally, your solicitor will transfer the remaining funds into your nominated bank account. If you’re wondering how long the equity release process can take, it will vary depending on a number of factors, but the tax-free cash could be with you in as little as 8-12 weeks!

And that’s it. Once you’ve made your application and gone through the above steps then your new property will be yours or tax-free cash will be in your account, for you to use towards your financial goals.