Can I Move House?

Lifetime mortgages are portable from property to property. Some Reversion plans are not.

There may be many reasons for moving home once you have an Equity Release plan. After all, the minimum age to start one is usually 55 and it would be odd to make a decision that commits you to stay in one place for possibly the next 40 years! However, moving house when an Equity Release plan is involved brings with it some additional things to think about.

The main issue to start with is the type of property you are thinking of moving to. When you first took your plan, all you were probably interested in was the eligibility of the property you were living in. All the property criteria for that plan was in the information given to you but, to be honest, it was of no interest to you at that time. If you are going to move, it is now of major interest to you. All mortgages have there own eligibility rules and Equity Release plans are no exception. From the type of construction and age to the location and value, each plan may have its own preferences. That is not to say that if the property does not meet these rules there is anything wrong with the property. It does mean though that transferring the Equity release plan becomes a headache. A headache with only three options: 1.You don’t move 2. You move and repay the Equity Release Plan or 3. You move, but have to find a different Equity Release provider. One that likes your new property.

One of the more common situations is a move into a warden assisted property or something similar. these properties are usually leased as opposed to freehold and as such rules regarding the length of the lease will be important to any lender. Many will refuse them outright.

Video courtesy of Dennis Perry at The Right Equity Release.

It is not only the Equity Release provider that has influence. It will be a condition of your loan that the property is properly insured. If the insurer doesn’t want to insure, because of the location, flood risk or any of many reasons, then you will be faced with further problems. It may be that the insurer will insure, but their conditions or cost is not to your liking.

Here’s a checklist of what you should consider before committing yourself to moving house:

  1. Look at the terms and conditions of your existing plan regarding a move.
  2. Talk to your adviser about the move at the earliest opportunity.
  3. Check that your new property is eligible to carry the Equity Release plan.
  4. Check that the property can be insured at terms acceptable to you.
  5. Do a thorough appraisal of all the costs involved. Get all costs and fees in writing wherever possible
  6. Consider looking at different Equity release providers. There may be better deals on the market than the one you have!

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