Equity Release – the Role of Solicitors – Article by Alister Jones, Solicitor and Equity Release Specialist
The reasons for choosing to go ahead with Equity Release (also commonly known as a Lifetime Mortgage) are varied. Many of our clients wish to release equity to carry out home improvements, fund foreign travel, or to re-mortgage.
Initial Steps
Once financial advice has been taken and the decision has been made to go ahead with Equity Release, your mortgage broker or lender will ask you to confirm the details of your solicitor shortly before your mortgage application is finalised. This is the time to contact your chosen solicitor.
It is worth highlighting that some Equity Release providers encourage clients to use their preferred solicitor. Sometimes, such referrals occur because large referral fees are being paid. Clients always have the right to choose their own solicitors and cannot be forced to use a solicitor preferred by their provider or broker.
Equity Release is a specialist area of work. Undertaking such work for clients is not something that all firms of solicitors choose to do. It is important that clients choose a solicitor with experience of Equity Release work. The best way to find an expert solicitor in this area is to carry out a search online, or to visit the website of the Equity Release Council (www.equityreleasecouncil.com).
Clark Willis Solicitors are members of the Equity Release Council. We believe it is extremely important that when acting for our clients, we are able to do so expertly.
What Next?
Once clients have chosen their solicitor, the next step is to wait for the mortgage offer to arrive from the solicitors acting for the lender. Throughout the Equity Release process, borrowers and lenders are always separately represented, mainly to ensure that borrowers are given independent legal advice.
The mortgage offers are very often valid for 42 days. Sometimes the offer can be extended. The important thing here is the difference with a standard residential mortgage, which is usually valid for 6 months. A solicitor with experience of Equity Release is invaluable. At Clark Willis we contact our clients by telephone as quickly as possible after the mortgage offer arrives, to arrange a face-to-face meeting, when advice can be given and all mortgage paperwork can be discussed and signed together.
Sometimes it is not possible for Equity Release clients to visit us at our Darlington or Northallerton offices. Where clients find it hard to get out and about, we are always willing to visit clients in their homes.
It is not usually necessary to have more than one meeting with your solicitor. The important thing is to ensure that all of the documents for signature are ready to be discussed before the meeting is arranged. As long as this is the case, one meeting should be enough.
After meeting with the clients, we collate all of the signed paperwork and sends these to the mortgage lenders solicitor. After usually a couple of weeks, the lenders solicitor responds to confirm that the lender is ready to proceed to complete the new mortgage. Sometimes the lender may have some additional questions to ask before proceeding. Again, the importance of choosing a solicitor who understands the Equity Release process, can save time and delay at this stage.
Once the lender is ready to complete the new mortgage, they usually propose a date for completion 2 or 3 days ahead. When this proposal is received, we contact our clients by telephone to obtain their agreement, whilst then also preparing and sending a provisional financial statement, ensuring they know exactly how much money will be available to them on completion. This is very important where there is an existing mortgage being repaid with the new Equity Release mortgage funds. Clients should always approve the redemption figure for their old mortgage. At Clark Willis we make sure that the new Equity Release mortgage does not complete until our clients are entirely satisfied with everything.
On Completion
When completion takes place, the solicitors for the mortgage lender send across the mortgage funds to our firm’s bank account. As part of that transfer, any existing mortgage will also be paid off. All remaining money, after payment of fees, is then transferred to our clients preferred bank account.
From the clients point of view, the new mortgage will now have commenced and there is nothing more they need to do. The only remaining thing is to register the new mortgage with HM Land Registry (and remove any old mortgage if required). Once this is done, we will send the up to date Land Registry documents to our client directly.
How can we help?
We are happy to assist with Equity release across the North East and offer home visits for those who may find it difficult to come into one of our regional offices. If you have any questions about Equity Release, or if you would like Clark Willis to act on your behalf, please do not hesitate to contact Alister Jones, Head of our Equity Release team, or your local Clark Willis office on Darlington 01325 281111 or Northallerton 01609 765765. We will be happy to help.
