What costs are involved in equity release schemes?

 

When you apply for any type of financial product, you will more than likely have to pay an application fee and various other costs. The same applies for equity release schemes. Before entering into and equity release scheme it is essential that you understand the full costs of the scheme. Looking at costs involves considering not only the direct establishment costs, but also the total costs over the duration of the scheme.

You should always seek legal advice from a qualified financial counsellor before applying for an equity release schemes. You should also seek legal advice from an equity release solicitor. Following are the main costs you should ask your equity release solicitor about:

Application fee

Also called an arrangement fee, this is usually around £750.

Legal costs

The costs of using an equity release solicitor will vary but are generally around £300-700. The amount will vary depending on the solicitor you choose and their hourly rate. Some equity release solicitors offer fixed fee services. However, if you are asking an equity release solicitor to advise you on various equity release schemes, their fees will rise accordingly.

Valuation fee

You will need to pay for your property to be valued, which is generally charged as a percentage of the value of the property.

Early repayment charge

If you wish to pay a lifetime mortgage off early, you may be charged early repayment charges. These charges can be quite high, so it is important to understand how this may affect you in the future.

Rental charges

Under some home reversion schemes you may have to pay rent. Usually, if it is charged at all, this is only nominal rent. However, you need to consider your ongoing financial ability to meet these costs.

Building insurance

Your equity release contract will normally require you to take out comprehensive building insurance. Whilst this is a fairly standard cost in home ownership, it is important to factor it into your calculations accordingly.

Working out the costs that will apply to your contract overall can be difficult without the help of a professional. An equity release solicitor can examine a contract carefully to consider the possible costs that could accrue in different situations.

If you are looking for a specialist property solicitor, we can help. Call us on 0800 1777 162 or fill in the web-form and speak to one of our trained advisors. We can put you in touch with the right property solicitor in your location and get you the advice you need.

Call
0800 1777 162
or fill in the form
Our trained advisor contacts you
Your chosen specialist solicitor calls you
Quick enquiry form
Area of law:
Name:
Town/City:
Email:
Phone:
Brands we work with

Brands we work with

Contact Law supports the endeavours of STAE and commends all the work they are undertaking to assist in the plight of the Asian Elephant

 

We use cookies on the Contact Law site to help us improve it.

If you would like to allow our cookies, please click 'Continue' or carry on browsing. For more information on cookies and how to change your settings, click 'More info'.