Equity release makes it possible for homeowners who are at least 55 years old to release money tied up in their property. In order to complete the equity release process, which will result in homeowners receiving tax-free income to spend in whatever way they choose, equity release solicitors are always required.
The equity release provider will require their solicitor and the borrower will need to have his or her own solicitor engaged in the process. Laws were passed requiring the borrower to have a different solicitor than the lending company.
When choosing a solicitor, homeowners should choose a solicitor who is a member of the Equity Release Solicitors Alliance or ERSA. ERSA was established on January 26th 2009 and consists of a group of law firms that specialise in equity release. The main goal of ERSA is to make sure that homeowners have expert legal advice before taking out an equity release plan.
Solicitors who are members of ERSA are required to have years of experience in equity release. Their experience will benefit their clients in that they will make sure that the legal aspects of the equity release process are adequately taken care of.
The process of equity release will start with an application. This application determines if the client is the right age and in the right situation to enter into equity release schemes. Solicitors will help with the paperwork filling out necessary information and explaining what the application is for. They will also be there to help make sure all information is accurate for the provider’s solicitor in case questions arise.
Equity release solicitors provide guidance to homeowners throughout the entire equity release process. They make sure that homeowners are aware of the risks and the rewards of the equity release plan that they have chosen and the legal obligations attached to it.
Equity release schemes are varied in form. Solicitors can help a homeowner choose the equity release plan that best suits them. For instance, the enhanced equity release mortgage allows a person to be 55 years or sometimes younger. The enhanced option is for those who have a serious illness with a certain expected amount time left in this world. For further details regarding Enhanced Equity Release visit www.WhatIsEquityRelease.org.
Home reversion, which is not a mortgage but a home sale and another form of equity release requires you to be 65 years or older. You sell all or part of your home to a lender in exchange for funds to use for expenses. The solicitor hired to help with equity release should explain both options in detail.
Like comparing the equity release schemes for the best option available, it is possible to compare solicitors available for equity release. Since the solicitor will be a part of the entire deal including when it is time to sell the property, you want to ensure you hired the right person.
Equity release solicitors also ensure that once the property is sold, the equity release provider receives the initial capital that was lent to homeowners and the accumulated interest.
Finally, it is the responsibility of equity release solicitors to make sure that they complete the Safe Home Income Plans or SHIP certificate. The SHIP certificate states that the equity release plan was discussed with the homeowner and that the homeowner understands the consequences of taking up the equity release plan. It is not possible for an equity release plan from an equity release provider who is a member of SHIP to proceed without a signed SHIP certificate. In the SHIP certificate, the equity release solicitor is acknowledging that all of the essential features and implications of the equity release plan have been brought to the attention of the homeowner. The SHIP certificate makes sure that there are not any future misunderstandings & provides another layer of protection in the regulation of these financial products.
There is no obligation during the process to go through with a home reversion or lifetime mortgage equity release scheme. It is only when all the documents are signed that the obligation exists for the homeowner. It is the job of the homeowner to ensure they are comfortable with the paperwork and details of the equity release programme before signing any of the paperwork.
Since solicitors are hired by the homeowner, any questions that a homeowner has can be answered before the process is complete. It is the responsibility of the homeowner to voice any confusion or worries they might have about the process. Equity release solicitors will conduct their job as appropriate; therefore, homeowners must also do their due diligence.
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