Cost of Equity Release

There are a number of different equity release schemes available to, mostly, those over 55 years of age. The main aim of equity release is to allow elderly people to release the capital value tied up in their house. In exchange for this, the equity release company will take a security over the property. In some instances, the client will pay something, perhaps interest, to the equity release company or won’t pay anything, preferring the interest to “roll-up” and to be capitalised when the house is eventually sold. Before you start, it’s important to be aware of the cost of Equity Release

Steps sometimes need to be taken to ensure that, in the event of a couple living in the house, that the rights to remain in the property continue until the second death.

Our typical fee for this type of work is £750 (exclusive of VAT). The cost for doing this work, therefore, is £900 (Including VAT).

At the core of the equity release process are the necessary steps we carry out in a re-mortgage transaction. However, there is additional documentation to ensure your rights are completely preserved, especially to ensure that there is no recovery by the lender on first death, in the case of couples.

Our fee is only part of the cost of the equity release process. There are additional costs involved. Some of these costs will vary, depending on a number of factors. We would stress that we have no control at all over these costs. If you wish to take advantage of equity release, you will have to pay these charges. So, please be cautious if someone only gives you a note of the fee for the legal work. The actual costs are likely to be very much more!

The additional costs of Equity Release

Equity release attracts a set of specific additional costs. These additional costs can vary depending on the location of the property and the range of reports required.

We will now provide an example of costs in an Equity Release case:

Cost of equity release

 

Legal Fee

£750.00

VAT on the Fee

£150.00

Property Search Dues (Property Enquiry Certificate and Legal Report) *

£175.00

Registration Dues of Discharge#

£70.00

Registration Dues of Standard Security

£70.00

Cost of Advance Notice

£20.00

Cost of Coal Authority Report

£41.94

Cost of electronic money transfer

£15.00

Estimated Total

£1,291.94

How can these additional costs vary?

* This is a combined cost of a local authority search and title search instructed through independent Searchers. This provides two of the reports we need to send to the purchaser’s solicitors as part of the conveyancing process. In addition, we may need to order a plans or other searches to send to the solicitors representing the Equity Release company.

# The registration dues of a Discharge will only apply if there is a mortgage over the property secured by a Standard Security which we need to remove from the record or if a mortgage has been repaid but the Standard Security has never been discharged.

What’s involved in the process?

The equity release process is a process which we will lead you through to successfully release equity, in the form on cash, locked up in your home. There are essential steps we must take to achieve this. These are:

  • Take your instructions and giving you advice
  • Carrying our anti-money laundering checks to comply with regulations
  • Reviewing the equity release offer and conditions and reporting to you
  • Ordering up and checking the title to your house
  • Ordering and checking various reports and searches
  • Preparing the Standard Security in favour of your new lender
  • Explaining the content of the Standard Security and loan documentation to you and having it executed
  • Preparing the Discharge of the Standard Security in favour of your existing lender and having this executed by the Lender, should you have an existing loan
  • Ordering loan funds from your new lender
  • Redeeming your mortgage, if necessary
  • Sending the Standard Security in favour of your new lender for registration in the Registers of Scotland
  • If appropriate, sending the Discharge for registration in the Registers of Scotland
  • Confirming completion and accounting to you

Are there circumstances where the cost of Equity Release might increase?

Our fixed price fee covers all of the steps we’ve outlined above. However, as we indicated above, there can be some circumstances where additional work is required. There may be issues of title to be resolved or problems with alterations or additions made to the property. There may be a problem with the property boundaries or some adverse notice issued by the local authority. These are just some of the problems you might face when selling a house. We always attempt to deal with these promptly and properly and try to carry out the additional work within the fixed fee quoted. However, on occasions, the nature and complexity of the problem means that significant additional work is required to rectify the problem.

In such circumstances, we will explain the problem to you as soon as we find out about it. We will let you know whether we expect to resolve this within the fixed fee price we’ve quoted. If the work is of such a nature that it will take considerable additional time or is of a complex nature, we will advise you of the additional likely cost to resolve the issue and fix the problem.

Examples of regular additional costs

Some additional issues regularly appear in purchase transactions and we are able to advise of the additional charges required to resolve these. The following items attract the charges set beside them:

Additional Item

Fee

VAT

Total Cost (Incl. VAT)

There are additional Standard Securities registered against the title that need to be discharged

£150

£30

£180

There’s an adverse entry in the Legal Report where an affidavit is required to allow the sale to proceed

£150

£30

£180

Checking certificates for alterations/obtaining a certificate of comfort from the local authority

£200

£40

£240

Transferring the title from sole name to joint names or from joint names to sole name.

£250

£50

£300

Where we need to carry out additional work for you and if it does not appear in the table above, we will charge a time-based fee at the rate of £200 per hour exclusive of VAT. That means the cost would be £240 per hour (inclusive of VAT)

If you would like more information or a detailed breakdown of the cost of your Equity Release case, please complete this short enquiry form.

Equity Release follows a similar procedure to a re-mortgage. To find out more about re-mortgaging a house, check out our Re-mortgaging a house page by clicking here.

If you want to find out more about the conveyancing process, please check out our article: Conveyancing solicitors – what are they and what do they do? by clicking here.