You have a high chance of getting equity release loan approval if you own a property and you are over 55 years old. It does not mean you are not going to encounter any problems along the way. You still need to consider other charges before receiving the loan. These are some of the costs that you need to prepare for.
Advice fee
It helps if you seek help from an equity release adviser before you get a loan. The information you obtain online is not necessarily accurate. You need to clarify some details, and only an adviser can do it for you. Make sure that you choose the right person who has enough experience and credentials for doing the job. After consulting with an adviser, you will feel more confident about the loan, and you will not regret getting it.
Valuation fee
You need to know your property’s value so that you can decide if you will pursue the loan. You also need to know the percentage of the value that you are willing to borrow. Usually, the average is between 30-50% of the total property value. When you know your property’s worth after the valuation, you can decide how much you are going to take. Another reason for doing the assessment is that you want to increase the value of the property if possible. Simple changes and additions could drastically boost the value. Hence, even if you are only borrowing 20% of its worth, you will still be getting a lot.
Legal costs
Dealing with equity release loans requires you to get help from a legal expert. You want to have a smooth transaction if possible. You also want to get rid of potential problems once you have obtained the loan. There is also some paperwork involved, and you will find it easy to deal with when you have a legal expert helping out.
Property insurance
The creditor will only approve your loan request if your property has insurance; otherwise, you need to purchase it before the creditor proceeds with the loan application. You are not going to sell the property any time soon. Hence, the creditor wants to know that it will stay in perfect condition until it is time to sell it. If not, the insurance company can at least take care of the expenses.
When you compute all these expenses, you could end up with around 1,000-3,000 pounds. You need to prepare the said amount before moving ahead with the transaction. If you think it is too much, you might want to consider other loans that do not require you to use your property as security.
Given your age and employment status, a loan designed for equity release over 55 is probably the best choice for you. Although you can try other loans out there, the chances of getting approved might be low. If you want to be sure that things will end as planned, you can try equity release.
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