There are three particular areas where lenders may need to keep reviewing: these are portability of your equity release, the ability to make keep making withdrawals in the future, and your eligibility to make capital repayments.
Portability: According to the Equity Release Council rules, you must be able to “port” (transfer) your equity release plan onto another eligible property if you wish to move. You ensure that the property in question still satisfies your provider as a representation of the security for your loan.
What does it mean for you?
Because equity release providers always keep their borrowing requirements under review, a property that’s accepted now, might not forever remain satisfactory as standards change. Thus, it’s best if you discussed the acceptability of your alternative property with your provider before you commit to buying it.
Otherwise, you will find your options being limited and may have to repay your loan through early repayment penalties.
Future Cash Withdrawals and Advances: Some equity release providers may permit you to make other withdrawals or cash advances as a flexible ‘drawdown’ Lifetime Mortgage. But that is at their discretion, which means future access to more sums of money does not remain certain for you.
Perhaps your equity release provider may deny your request to draw more sums of cash, and you would like to switch to an alternative provider to access more money, you must first repay your initial mortgage.
Capital Repayments: Equity release providers are making options for clients to make ad hoc capital repayments a prevalent feature, especially of some rolled-up interest with Lifetime Mortgages.
Here's a thing...
Your provider will decide whether they can accept payments of this manner, and the frequency and size each payment must be as you make it. You must discuss with your equity release advisers if you would like to get a plan where you can make capital repayments.
You may also wish to gain more knowledge about whether your provider reserves their right to exclude any options of capital repayments. If your provider restricts access to Drawdown Cash Reserves during a determined period, and after the receipt of a capital repayment; also, how capital repayments will apply to your account.
What are the Criteria for Equity Release?
For you to qualify for equity release you must:
Be at least 55
Own property valued at £70,000 and above
I am 50 years. Can I Take an Equity Release Plan?
If you want to release a cash lump sum from your estate and are under the age of 55, you can’t qualify for a regular equity release plan. However, you can always seek out expert advice to find alternative solutions.
How Old Must I Be to Qualify for a Lifetime Mortgage?
You must be 55 years, and above, to become a qualified applicant for a Lifetime Mortgage. If you want to take out an equity release loan with your partner, the youngest borrower must be at least 55 years old.
If you want to take out a Home Reversion Plan; you must both be at least 60.