Equity Release on jointly owned property is a scheme which enables homeowners to tap into the wealth tied up in their property.
This process involves a joint equity release plan, which can provide either a lump sum or a steady income free as you choose it. This removes the need to sell or move out.
In this article, we’ll explore equity release on property which is jointly owned and the options available to you.
All applicants apply when releasing equity from a jointly owned property.
The equity release lender will consider all joint owners’ ages and health when deciding how much equity joint applicants can release.
If you have a joint mortgage on the property, the money received from the equity release loan must first be used to pay off the existing mortgage. Therefore, any remaining funds are available for you to use as you wish.
Like ordinary equity release, releasing equity from a jointly owned property can be complicated. Partly, this is because all joint owners have to agree on the equity release application. If one owner wants to release equity but the others do not, the application cannot go ahead.
Equity release products which are suitable for jointly owned property include joint lifetime mortgages. These are a type of equity release plan where the loan is only repaid when the last surviving owner dies or moves into long-term care.
Equity release is a way for homeowners, typically of retirement age, to unlock the financial value tied up in their property. When you choose a joining equity release plan, the application is made by all co-owners of the property.
An equity release lender provides the homeowner with a lump sum, or regular payments based on the property’s value. It is up to you what to spend this money on, examples ranging from home improvements to supplementing your retirement income.
The amount of money which you can receive from an equity release product depends on several factors. These include the property value, the age of the youngest homeowner, and the specific terms of the equity release provider.
Equity release plans are often a means to gain some financial freedom, as a homeowner.
However, before proceeding, it’s important to fully understand the terms and conditions. This is where professional advice from an equity release specialist can be invaluable.
If it is owned by more than one person, a property is jointly owned. The joint owners hold the title deeds to the property and can be listed as joint tenants or co-owners on the land registry.
With joint tenancy, the owners have equal rights to the whole property. If a joint tenant dies, their share passes to the surviving joint tenant(s).
With co-ownership or tenancy in common, each owner has a distinct share of the property. The shares may be equal or unequal. Consequently, if a co-owner dies, their share passes under the terms of their will. Therefore, not automatically to the other owners.
It is possible for a jointly owned property to also be a shared ownership property. This is where you co-own the property with a housing association, paying rent on the remaining share which you don’t own.
If you are considering equity release, understanding the type of joint ownership you have is important. It affects how much equity you can release and the equity release process.
There are two main options for equity release on joint ownership property: joint lifetime mortgages and home reversion plans.
With a joint lifetime mortgage, both you and your co-owner take out a loan against the property value. The loan, plus interest, will have to be repaid when the property is sold after your death. You can, however, choose to pay interest monthly if you wish.
With a home reversion plan, you only sell a share of your property to a provider in return for a lump sum or an gradual income. You’re then able to stay in your home for as long as you like.
The equity release plan ends upon the death of the last joint owner, or when the last joint owner sells the property or moves into permanent long term care.
You cannot take out equity release on just your share of a property you co-own. You would either need to make an application for equity release in both your names or remove one of the joint owners from the property’s title deeds and apply individually.
If you are married or in a civil partnership, your partner will need to agree to the equity release. But if you’re single, you can apply for equity release on your own.
Yes, both homeowners will need to be over the minimum age of 55 to qualify for equity release.
Yes, two people can have equity release if only one name is on the deeds. However, once again, both homeowners must be over 55, and they will both need to agree to the equity release.
A shared ownership scheme is where you buy a share of a property from a housing association and pay rent on the rest. You can usually buy between 25% and 75% of the property.
If you co-own a property through a shared ownership scheme, you may be able to release equity from your home. However, this is highly dependent on the terms of your mortgage and permission from your housing association.
If you want to release equity out of your shared ownership property, you’ll need to contact your housing association to see if this is possible. Each housing association has its own rules about equity release, so it’s worth getting in touch to find out more.
Yes, you can take out equity release for properties owned as tenants in common. Tenants in common means that each owner has an undivided share of the property, which can be passed on to beneficiaries in a will.
However, once again, both homeowners must be over 55, and they’ll need to agree to the equity release.
All applicants apply when releasing equity from a jointly owned property. The equity release lender will consider all joint owners’ ages and health when deciding how much equity joint applicants can release.
If you have a joint mortgage on the property, the money received from the equity release loan must first be used to pay off the existing mortgage. Therefore, any remaining funds are available for you to use as you wish.
Like ordinary equity release, releasing equity from a jointly owned property can be complicated. Partly, this is because all joint owners have to agree on the equity release application.
If one owner wants to release equity but the others do not, the application cannot go ahead.
Equity release products which are suitable for jointly owned property include joint lifetime mortgages. These are a type of equity release plan where the loan is only repaid when the last surviving owner dies or moves into long-term care.
There are legal considerations to equity release, such as if one joint owner wants to move out. Consequently, they can’t sell their share of the property if an equity release plan is in place. The equity release loan is secured on the entire property, not just your share.
Checking the property’s title deeds is necessary if you’re considering equity release.
These will show the names which the property is under, whether there is a sole owner or if there are joint names under the property. Only properties owned jointly can proceed with a joint equity release plan.
Legal considerations for equity release also extend to the property type. For example, there are less equity release providers for jointly owned shared ownership property. This is due to the unique legal complexities surrounding these properties.
Before you proceed with an equity release plan, it is important to assess your financial circumstances . One thing to consider is the impact interest rates which the scheme may have.
As the interest on an equity release loan is usually rolled up and added to the loan, this can quickly increase the amount which you owe.
Looking further down the line, the proceeds from selling your property will be reduced if you do choose an equity release plan. This is because the loan you receive plus the accumulated interest is repaid from the sale proceeds when the last joint owner dies or moves into long-term care.
Like other types of equity release, choosing this financial option can affect your tax situation and your eligibility for state benefits.
Alongside this, early repayment charges are often part of equity release schemes. If you decide to repay the equity release loan early, these can be substantial
You may also need to consider fluctuating house prices. If your property’s value falls, you could end up owing more than your property is worth.
This is known as negative equity. However, most equity release providers are members of the Equity Release Council in the UK, offering a no negative equity guarantee. This means that you’ll never owe more than your property’s value.
In equity release, the age of the joint owners play a role in the amount which you are able to release.
The minimum age for equity release in the UK is 55, although some providers may have higher age limits. The younger you are when you take out an equity release plan, the less money you can borrow.
The health of a joint tenant also affects how much you can borrow. Some equity release providers offer enhanced terms for people with certain health conditions or lifestyle factors.
However, the equity release loan is only repaid when the last surviving owner dies or moves into long-term care. Therefore, the age and life expectancy of the youngest homeowner are key factors which equity release providers consider.
Your personal circumstances are also likely to impact which equity release scheme is the best for you. The two main types are lifetime mortgages and home reversion plans.
A lifetime mortgage is a loan secured on your property. Depending on your needs, you can choose to receive either a lump sum, a regular income, or both.
The loan plus interest is then repaid when the last surviving owner dies or moves into long-term care.
However, with a home reversion plan, rather than retaining ownership of your property, you sell a part or all of your property to a home reversion company. You can then receive a lump sum or regular income. Furthermore, you can continue to live in the property rent-free until you die or move into long-term care.
It is essential to note that terms and interest rates vary across providers, as comparing these to find the best scheme and provider for your equity release plan is crucial.
Checking if the provider is a member of the Equity Release Council is also helpful, as this offers certain guarantees.
Consider any potential restrictions which each plan may place on moving homes in the future. Also, check if equity release affects any state benefits which you receive.
Call Boon Brokers on 0333 567 1607 to discuss your equity release requirements.
.
All equity release and mortgage advice is provided by Boon Brokers Limited, which is authorised and regulated by the Financial Conduct Authority (FCA). The Financial Services Register number is 973757.
If you take out a product with Boon Brokers, we will receive a fee for introducing you to them. Boon Brokers provides advice for free and without obligation. By contacting Boon Brokers through us, the cost of any equity release product would be the same as if you had contacted them directly.
The fee we receive is used to help keep this site operational and to produce new content.
Think carefully before securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
You cannot take out equity release on just your share of a property you co-own. You would either need to make an application for equity release in both your names or remove one of the joint owners from the property’s title deeds and apply individually.
If you are married or in a civil partnership, your partner will need to agree to the equity release. But if you’re single, you can apply for equity release on your own.
Yes, both homeowners will need to be over the minimum age of 55 to qualify for equity release.
Unlike with standard equity release plans under which if the owner dies, the plan ends with a joint lifetime mortgage, the loan continues and is repaid when the property is sold after the second person dies.
With a home reversion plan, if one of the owners dies, then their share of the property is passed on to the surviving owner. The equity release lender will still have a claim on the property when it’s sold. However, they’ll need to make the monthly repayments on their own.
It’s also worth noting that if you have a joint lifetime mortgage, the loan will need to be repaid when the property is sold after your death.
It is essential that you understand what will happen upon the death of the first borrower under the specific equity release plan you are applying for.
If one owner of a property dies before taking out equity release, the surviving owner will still be able to make an equity release application. However, they’ll need to be over 55, and they must own the property outright. They then need to apply for a new equity release plan as normal.
Remember that there are both risks and rewards to equity release. Whilst it can provide a financial boost, there are also potential downsides.
For instance, accumulated interest on a lifetime mortgage plan can significantly increase the amount which you owe. This is likely to reduce the amount of money left to your loved ones. If the last surviving owner moves into long-term care, it is also possible that your home may need to be sold to pay off the remaining loan.
Moreover, equity release can affect your tax position and eligibility for state benefits depending on the money which you receive and how you choose to receive it.
Another potential downside is that if you want to move house or downsize in the future, there may be restrictions or charges depending on the scheme which you have chosen.
Despite this, equity release can still provide financial freedom in retirement. It allows you to unlock the wealth tied up in your property without having to move. If the property value increases, you could release even more equity.
Choosing equity release often holds a significant impact on your inheritance. As interest on a lifetime mortgage is usually added to the loan, this can significantly increase the amount you owe over time.
To avoid this, you should explore available options. For instance, some equity release plans offer an inheritance protection guarantee.
This is where a percentage of your property’s value is kept back to leave as an inheritance.
Before proceeding with equity release, remember that it’s important to discuss the potential impact on inheritance with your family and beneficiaries.
If you are considering equity release it can be helpful to seek professional advice. An equity release specialist can offer you a well-informed explanation of the different options available to you, as well as advising you on what is best for you.
A financial adviser can assess the impact of equity release on your tax situation and eligibility for state benefits.
They can help you to understand the terms and conditions of the equity release plan and the potential implications for your loved ones.
Furthermore, checking the credentials of an adviser can provide the security that their advice is reliable.
They should be registered with the Financial Conduct Authority, and ideally be a member of the Equity Release Council.
When releasing equity on a jointly owned property, the first step involves checking your eligibility criteria. The equity release provider will assess the age of the youngest homeowner, the property value, and any outstanding mortgage on the property.
There may also be other factors considered. In addition, they will check if the property is owned jointly, or if there are more than two owners.
Next, the joint owners need to decide what type of equity release product best suits them. This may be a joint lifetime mortgage or a home reversion plan.
Once the owners decide, they must make a formal application to the equity release provider. This will include providing proof of property ownership and details of the property’s value. Before proceeding with an equity release application, seeking advice from a financial advisor is advised.
If you co-own, shared ownership equity release is a type of scheme which you can use. This is an option where you co-own the property with a housing association, whilst paying rent on the share you don’t own.
The amount of money you can release with a shared ownership equity release is based on the share of the property which you own. The equity release provider will also consider the property’s total value and any outstanding mortgage.
Shared ownership equity release can provide a way for co-owners to release more money from their property without selling their share.
It is typically slightly more complicated than standard equity release, and fewer lenders offer this as a result.
The Financial Ombudsman Service is an independent service in the UK that resolves complaints between financial businesses and their customers. If you have a complaint about your equity release provider, you can refer it to the Financial Ombudsman Service.
If you have an issue with your equity release provider, you should first try to resolve the issue before making a complaint. If their response is unsatisfactory, or they do not resolve the issue within eight weeks, you should then go to the Financial Ombudsman Service.
The Financial Ombudsman Service will consider all aspects of the case, including any documents and any relevant laws or regulations.
They will then decide what action, if any, should be taken.
Choosing the right mortgage broker is an important aspect of the equity release process. A good broker will understand your needs and circumstances, as well as being able to advise you on the best equity release product for you.
It is important that your chosen mortgage broker is experienced and qualified. They should be registered with the Financial Conduct Authority, and ideally be a member of the Equity Release Council. It is beneficial if they have access to the whole property market, and you may want to consider if they are tied to certain lenders.
A good broker will explain the lending criteria of different equity release providers and will help you to understand the terms and conditions of the equity release plan.
They can also advise you on the maximum loan you could get, as well as the potential impact on your inheritance and property wealth.
Co-owning where two or more people have ownership rights in a property. Each co-owner has a share in the property, which may be equal or unequal depending on the agreement between the owners. Co-owners might be friends, family members, or business partners.
When you co-own a property, you have the right to live in the property and use it as you wish, subject to any restrictions in the co-ownership agreement. You also have the right to sell your share of the property, although this can sometimes be subject to the agreement of the other co-owners.
There are several responsibilities which you have as a co-owner of the property, such as maintaining the property and ensuring it remains in good condition. This includes contributing to the costs of repairs and maintenance.
In addition, there are financial obligations which come with being a co-owner. This may include paying the mortgage (if there is one), property taxes, and insurance. If the property is rented out, co-owners are also responsible for managing the rental, as well as complying with landlord obligations.
Although they can, it is necessary that co-owners agree to a joint equity release plan and apply together. When deciding how much equity can be released, the equity release provider will take into account the age and health of all co-owners. Consequently, careful consideration from all co-owners is essential.
If you choose to receive the money released as a regular income rather than a lump sum, your approximate annual income can be boosted by equity release. The added amount of income received will depend on the value of your property, as well as the terms of the equity release plan.
Equity release is a form of loan, so although it may boost your income, the money released with interest will need to be repaid eventually. This is usually from the sale of your property when you die or move into long-term care.
Using mortgage brokers to arrange equity release can be beneficial. A good broker will understand the equity release market and will be able to advise you on the best product for your circumstances. In addition, they can handle the application process for you. It is further helpful if they are a member of the Equity Release Council, as this ensures that they adhere to a strict code of conduct.
The adverts for Boon Brokers on this page have been signed off as a Financial Promotion by Boon Brokers Limited, to ensure that they are in compliance with Section 21 of FSMA. Boon Brokers Limited is authorised and regulated by the Financial Conduct Authority (FCA). The Financial Services Register number is 973757.
Looking for a Christmas Bargain?
Up to 60% off some items
on Amazon today
Have a look and see if you can find any deals
Unlike most equity release advisors, Boon Brokers do not charge any fees! Have a free consultation to see how they can help.
You can speak to Boon Brokers on the number below and discuss your options
0333 567 1607
Use the equity release calculator and see how much money you could receive.
You can book a call back from for an equity release specialist, who can call you when it's conveniant
All equity release advice is provided by Boon Brokers Limited, which is authorised and regulated by the Financial Conduct Authority (FCA). The Financial Services Register number is 973757.
If you take out a product with Boon Brokers, we will receive a fee for introducing you to them. Boon Brokers provides advice for free and without obligation. By contacting Boon Brokers through us, the cost of any equity release product would be the same as if you had contacted them directly.
The fee we receive is used to help keep this site operational and to produce new content.
Think carefully before securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
Get FEE-FREE Equity Release Advice
