Equity release

Gorgeous_George

Assuming loan interest rates are 7% he would need to live to 88 before he wins on the deal financially.

Of course, if he gets to spend his money rather than leaving it for someone else to spend, it's a good deal for him.


GG

m00m00

my worry about the rent aspect of it is regarding the tenancy. Sharks are likely to insist on an AST only, rather than a secured tenancy, and all bets are off after 6 months on an AST with a shark.

dopester

phil_b wrote: »

how long he lives (unpredictable obviously)

I'm not sure I'd like to enter any agreement where the other party would wake up every morning and be wishing you would hurry up and die.

I'd also be more fearful of having "an accident".

ps2659

m00m00 wrote: »

my worry about the rent aspect of it is regarding the tenancy. Sharks are likely to insist on an AST only, rather than a secured tenancy, and all bets are off after 6 months on an AST with a shark.

I have just called my friend and asked about the AST he says that they have guaranteed a secured tennancy until he dies or goes into permanent care with no rent to pay, I have told him some of the comments that I have received on here and he seems to think the £20000. is probably low but he says he will have no worry with the thought of waking one morning to the postman delivering his notice to quit.

EdInvestor

He should look into a proper equity release deal through a well known regulated provider such as the ones listed here:

www.ship-ltd.org


He will likely get more money and be secure in his home.

These other people are sharks. :mad:

zappahey

dopester wrote: »

I'm not sure I'd like to enter any agreement where the other party would wake up every morning and be wishing you would hurry up and die.

I bet Andre-Francois Raffray was starting harbour those wishful thoughts

http://www.lubbockonline.com/news/080597/frances.htm

Mrs. Calment (France's oldest woman, now deceased) had no direct descendants, having survived her husband, her daughter and grandson.
In her later years, she lived mostly off the income from her apartment, which she sold cheaply more than 30 years ago to a lawyer, Andre-Francois Raffray.
He had agreed to make monthly payments on the apartment in exchange for taking possession when she died, but never got to do so. He died more than a year ago at 77; his family was required to keep making the payments.

Generali

ps2659 wrote: »

But is it a good deal £20000. cash and no rent for the rest of his life ?

According to a very back-of-envelope calculation assuming equivalent rent of £5400 per year and an interest rate of 5% I think the initial sum should be about £34,000 assuming he lives for 20 years.

These deals are very common in France and work very well in my limited experience. Over there you normally receive an income rather than a one-off payment though. That woman who was the oldest in the world (she gave up smoking aged 117 or something) had entered into one of these agreements.

BobProperty

Generali wrote: »

According to a very back-of-envelope calculation assuming equivalent rent of £5400 per year and an interest rate of 5% I think the initial sum should be about £34,000 assuming he lives for 20 years.

Great minds etc.....
Ed the "ship" link is wrong. The text is correct but the link has .uk on the end which it doesn't need.

Generali wrote: »

These deals are very common in France and work very well in my limited experience. Over there you normally receive an income rather than a one-off payment though. That woman who was the oldest in the world (she gave up smoking aged 117 or something) had entered into one of these agreements.

You get a combination usually, varying from a lump sum and a nominal annuity to a small sum and a large ongoing annuity. The reason? French succession laws which can't be "got around" by a will unlike in this country. So if you can't stand one of your relatives inheriting your house, you cash it in now and give the money to the other relatives you wanted your money to go to.

fiodyl

Am I missing something here?

The OP said he owns the house outright so therefore wouldnt he already be living there 'rent free'

So all this compay are offering him is £20k for something that is currently worth £95k?