Can Equity Release Be Transferred?

Equity release is often the perfect solution to many people’s money troubles. In fact, thousands of people up and down the country have already taken out an equity release plan!

If this is the case, then rest assured that you can move house after taking out an equity release plan if you choose to do so.

Lots of people wonder ‘Can equity release be transferred to another property?’ and we’re pleased to announce that yes, you can do so.

Can I transfer my equity release plan – Equity release explained

Lots of people turn to equity release to help them get through their retirement years. If you’re considering equity release, then you’re not alone!

Thousands of people up and down the country consider taking out an equity release plan every year.

Most people have heard of equity release, mainly because they’ve seen some of the very many equity release adverts advertised on the TV. Whilst lots of people have heard of the term before now, not everyone truly understands how it works.

It’s important to look at equity release as a loan and another type of mortgage. As with every loan or mortgage, you have to repay the loan at some point. Again, every loan is charged interest and equity release loans are no different.

However, what’s special about equity release loans is that you aren’t expected to pay back to loan until you pass away. Only then will you have to repay the loan, plus any interest. So, the loan will last for as long as you live. The loan only has to be repaid from the sale of your house, which usually covers the entire loan amount.

You don’t need to worry about your equity release loan falling onto your loved ones, as the Equity Release Council ensures that all lenders include a no negative equity guarantee as part of their offerings.

This means that your next of kin, whether it be a son, daughter or grandchild will never find themselves responsible for having to pay off the loan that you agree to.

People choose to release equity from their home for all sorts of reasons. For example, some people choose to spend their money on their loved ones, and some others choose to spend it entirely on themselves, and who could blame them.

There’s no right or wrong when it comes to spending your equity release money, as long as it is for a good reason and your provider knows your reasonings.

Equity release is not for everyone, which is why most lenders ask you to consult with an equity release adviser before getting in touch and applying for a loan.

Without an adviser, you would find the process a lot harder and lot more confusing.

Can equity release be transferred to another property and how does it work?

It is not common for people who take out an equity release plan to choose to move home in the future. However, as we all know, at times life can be unpredictable and doesn’t always go the way that you initially planned.

Transferring your equity release plan to a new property is not that common, but it certainly doable and is commonly known as porting your mortgage and scheme.

The good news is that whilst it might prove to be complicated for some, it is certainly possible. Lots of people praise the process and say that it was quite straight forward and seamless!

It is always worth seeking professional help if you do want to ‘port’ your mortgage to a new property. Some people choose to keep the same adviser as when they first applied for equity release, whereas some others choose to pick a new adviser.

They will be able to help to guide and support you, to ensure that transferring your mortgage to a new property is definitely the right decision for you.

If you do want to port your mortgage to a new property, you will have to apply to do so and qualify for the transfer. For example, the value of your new property will be taken into consideration, including what type of property it is.

The Equity Release Council state that the process is quite simple, starting with a porting enquiry and finishing with a change of address [1].

As with your initial equity release loan, you will be provided with a Key Facts Illustration which explains the ins and outs of your plan and how much you will be expected to repay by the time you pass away and sell your home.

Whilst the process is really similar to the initial equity release application, there are some differences. For example, you will have to pay your valuation fees upfront, but will most likely get a free property valuation.

It is also not mandatory to get legal advice when you transfer your mortgage onto a new property, and is entirely up to you whether you seek independent legal advice, although it is always advised.

If you are wondering ‘Can equity release be transferred?’ then talk to Equity Release Warehouse for help and support.

What might stop me being allowed to transfer my equity release plan onto a new property?

Whilst most people are able to transfer their mortgage onto a new property, some people might not be able to do this for a number of reasons. Unfortunately, some people simply do not qualify to do so. Each lender is different, and whilst you might qualify for some transfer plans with some lenders, you might not qualify for others.

Every lender is different and operates by different qualification and lending criteria. However, there are some generic rules that most people lend and operate by. This includes some of the following factors.

• Properties which are not standard, or have been built by non-standard materials (including some types of concrete)
• Retirement homes
• Properties which are owned through a leasehold which might only have a short period of time left on the lease
• Properties which are at risk of a natural disaster, including flooding
• Homes which need a lot of renovation work done to them, including properties which simply need modernising or which need a new central heating system.

It is always worth checking with an equity release advisor before applying for a plan. If you are ever in doubt, then you should speak to someone at the Equity Release Warehouse team.

Can equity release be transferred to a cheaper property?

Transferring your equity release plan to a cheaper property does come with some complications.

The first potential complication is that if the property you are moving to is cheaper, your lender might stipulate that you have to repay your current loan before taking out another one on the cheaper property.

This might make it a safer and more responsible investment and process for everyone involved if you do.

Some people who move to a property that is only half the value of their current property might have to pay off half the value of their current home before being able to port or transfer their mortgage.

This will be paid off from the sale of the property. As you can see, it is not always straightforward.

This is why you should always talk to an equity release advisor, even if you are simply just consider transferring your mortgage or taking out an equity release loan.

Can equity release be transferred? Talk to Equity Release Warehouse

It is always worth talking to a member of the Equity Release Warehouse team when considering taking out an equity release loan or transferring your current loan to a new property.

Our team is on hand to give you the very best advice, and will never put any pressure on you to release equity from your home. We will even use our own equity release calculator to find the best plans for you.

Our team is simply here to provide you with the necessary and relevant information for you to make your own decision. If you want more information on ‘Can equity release be transferred? then give our team a call on 0330 058 1579.

References

[1] https://www.equityreleasecouncil.com/wp-content/uploads/2019/06/porting-process.pdf