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Equity release - house

Freebasing Simon T

 
Posted

Has anyone done this or looked closely into it ?

I know you have to own the property, be 55 or over, but is there any 'small print' that needs to be scrutinized very closely?

 

TIA

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Posted (edited)

My parents did this 25 years ago ... worst decision they ever made in their life.

My Father passed last year, and we were looking to get Mum into care voluntarily , the problem was the equity release sharks (Aviva in this instance).

The 25K my parents had "released" was now looking at a repayment of £135000, but as Mum was still alive there was an early settlement penalty of a further £20000. This made it difficult to achieve what we wanted for mum.

Moving forward 12 months, Mum has now had to go into care as she has gone off her legs, so the early settlement figure is waived, it's not that I had any interest in the money, but it would have made things so much easier twelve months ago to get mum into care then, when she would have benefited from it.

Personally if you need money there must be better ways of getting a loan secured against your property, I would sell and downsize.

Edited by martyn pitt
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Posted

Unless you're desperate for the money quickly and don't think it'll cause a proble ir later years, I would not recommend it at all.

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Posted
4 minutes ago, martyn pitt said:

My parents did this 25 years ago ... worst decision they ever made in their life.

My Father passed last year, and we were looking to get Mum into care voluntarily , the problem was the equity release sharks (Aviva in this instance).

The 25K my parents had "released" was now looking at a repayment of £135000, but as Mum was still alive there was an early settlement penalty of a further £20000.

Moving forward 12 months, Mum has now had to go into care as she has gone off her legs, so the early settlement figure is waived, it's not that I had any interest in the money, but it would have made things so much easier twelve months ago to get mum into care then, when she would have benefited from it.

Personally if you need money there must be better ways of getting a loan secured against your property, I would sell and downsize.

Martyn - won't go into details but very similar experience with my mom and dad - looked good at the time but ended up a noose around there necks - make sure you seek professional advice before going anywhere near theses kind of companies - sure they have to make money just watch the % payback Ahhhhhhhhhh

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Posted

People need to comprehend the concept of 'compound interest'! If you borrow money on the understanding that no capital repayments are required, the end result can never be a happy one!

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Posted
17 minutes ago, Tim Richmond said:

People need to comprehend the concept of 'compound interest'! If you borrow money on the understanding that no capital repayments are required, the end result can never be a happy one!

Exactly the problem Tim, not helped by a high interest rate.

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Posted

My partner and I looked into doing this about 10 years ago ... would have been the worst decision we could have made .. but thankfully didn’t .

Id advise to only do it if you are in dire straights and have no other means of obtaining funds. Otherwise stick with it .

We have now thankfully paid off the mortgage and are sitting tidy in in our retirement nest egg . 

Hopefully I can then persuade her to move back up North and cash in on the equity of London house prices .. it’s getting bloody ridiculous down here.  

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Posted
1 hour ago, Stevegods said:

My partner and I looked into doing this about 10 years ago ... would have been the worst decision we could have made .. but thankfully didn’t .

Id advise to only do it if you are in dire straights and have no other means of obtaining funds. Otherwise stick with it .

We have now thankfully paid off the mortgage and are sitting tidy in in our retirement nest egg . 

Hopefully I can then persuade her to move back up North and cash in on the equity of London house prices .. it’s getting bloody ridiculous down here.  

Is your northern passport up to date mate. You know what the soul police are like these days.  

Trust your well sir :hatsoff2:

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Posted (edited)
6 hours ago, Tim Richmond said:

People need to comprehend the concept of 'compound interest'! If you borrow money on the understanding that no capital repayments are required, the end result can never be a happy one!

Compound interest should be drilled into kids before they leave secondary school.

 

I've always been very wary of equity release plenty of targeted daytime ads as well its legalised theft.  Could be the next scandal like PPI.

 

As others have said sell house amd downsize or sell house free up cash and possibly rent as another alternative.

Edited by Dylan
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Posted

These schemes were not driven by public demand but driven by greedy banks and building societies so they are not to be trusted at all 

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Posted
58 minutes ago, Dylan said:

r sell house free up cash and possibly rent and another alternative.

quite a few over 55's near me sold up and moved into a new council build of flats opposite a local pub, the rent is very low and the the pub is doing great business

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Posted
56 minutes ago, Mark S said:

These schemes were not driven by public demand but driven by greedy banks and building societies so they are not to be trusted at all 

Yes just another way of banks making immoral money.

 

they make out as if they are doing you a favour.

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Posted
1 hour ago, Winsford Soul said:

Is your northern passport up to date mate. You know what the soul police are like these days.  

Trust your well sir :hatsoff2:

Hiya Steve mate , hope you and the misses are both well .. all good here bud. 

As for my Northern passport ... it will never lapse ... can never take the Scouse out of the boy. 

My only issue would be the kids as they are all down here working and renting. Wish I could afford a deposit for all three of them but with prices the way they are .. not a chance, must check that lotto ticket for Euro Millions . 

Buying buy to let property’s up North is an option as good investments can be found . 

 

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Posted

I'm surprised that any enterprising record dealers haven't offered equity release on people's collections.  It would work in a similar way to bricks and mortar.

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Posted

Borrowing any money against your house leaves you vulnerable and you should get independent financial advice.

Ed

 

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Posted

Whilst Equity release is alarming, it's well worth reading this News Article "I came home to find my house had been stolen! Fraudsters intercepted my mail, altered Land Registry records - and got their hands on my property". 

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Posted

looking at it so far so good , early days 190000 tax free  1/3 of the house  x 

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Posted

Your main house after a couple of years living there, has no capital gains tax, so if you sold, it is a tax free payment anyway, even if you made a big profit against what you bought it for.

 

Ed

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