Equity release

yvonetta

Has anyone got any advise re Equity release. We are due to retire in two years and still have an outstanding mortgage. As we have lived in the family home for 28 years we are really reluctant to sell it and wondered if there is a reasonable way of releasing equity and still leaving some money to our children, any ideas?

Ian_W

Couple of factsheets from age concern and help the aged:

https://www.ageconcern.org/AgeConcern/Documents/FS12_0605.pdf

https://www.helptheaged.org.uk/Money/Investments/equityrelease/default.htm

Also if you do consider it use a member of SHIPs - safe home income plans - who have their own codes of practice. Website at:

https://www.ship-ltd.org/

Two varieties of schemes. First is where the lender buys a % of your property and the second is a lifetime mortgage where the interest rolls up. In both cases the older you are the better the terms as the lender, statistically at least, has less time to wait for the grim reaper [or full time residential care] to allow them to collect on the deal.

HTH.

EdInvestor

Look for the deal with the lowest interest rate and also closely check the redemption terms.The equity release market is getting more competitive all the time and it could be that if the value of your home goes up in a few years you might want to "remortgage" to better terms.

Also consider any scheme that offers income drawdown, where you don't take all the money at once (if you want more on top of the mortgage) but bot by bit as you need it. This will reduce the rate at which the interest rolls up.

jennifernn

I don't know if this will help you, but we remortgaged with the Halifax 2 ish years ago getting a "retirement mortgage" This means we do not need to repay what we borrowed until we sell the house. Our original mortgage (with Abbey ) only had £10000 due on it, but we borrowed £40000 on an interest only basis on a 2 year deal at a VERY good rate. We needed a bit extra for improvements and maybe a new car, but as it worked out we have only used about £3000 of what we borrowed. We managed to invest the extra cash in an account that paid interest at a higher rate than we were paying, so that covered all the payments.

Now we are nearly at the end of the deal we need to shop around, but I'm sure there are some good deals to be had.

yvonetta

Thanks a lot for the information it sounds like an excellent idea for us I will look into it

yvonetta

thanks for the advice much appreciated

yvonetta

EdInvestor wrote:

Look for the deal with the lowest interest rate and also closely check the redemption terms.The equity release market is getting more competitive all the time and it could be that if the value of your home goes up in a few years you might want to "remortgage" to better terms.

Also consider any scheme that offers income drawdown, where you don't take all the money at once (if you want more on top of the mortgage) but bot by bit as you need it. This will reduce the rate at which the interest rolls up.

thanks for the advice

yvonetta

Ian_W wrote:

Couple of factsheets from age concern and help the aged:

https://www.ageconcern.org/AgeConcern/Documents/FS12_0605.pdf

https://www.helptheaged.org.uk/Money/Investments/equityrelease/default.htm

Also if you do consider it use a member of SHIPs - safe home income plans - who have their own codes of practice. Website at:

https://www.ship-ltd.org/

Two varieties of schemes. First is where the lender buys a % of your property and the second is a lifetime mortgage where the interest rolls up. In both cases the older you are the better the terms as the lender, statistically at least, has less time to wait for the grim reaper [or full time residential care] to allow them to collect on the deal.

HTH.

I'm only 59 years old maybe too young for something for a change!

Ian_W

yvonetta wrote:

I'm only 59 years old maybe too young for something for a change!

Not too young - but probably too young to make it worthwhile. :mad:

Always the Free Bus pass to look forward to next year!! :eek: :rotfl:

margaretclare

Hi Yvonetta

We did equity release 3 years ago because, like you, we still had a mortgage, and it would have continued until we're 83. £260 a month was manageable, but we could see better uses for that money. However, one of us had to be 68 before we could release 25% of the equity in this property to pay off the original mortgage. What we have now is called a 'lifetime mortgage' with Northern Rock.

We looked at every other option including 'downsizing' - however, you can't downsize much from a 2-bedroom bungalow. What would be a good idea, and what I feel very very strongly about, is that people in their late 50s,60s and early 70s, should look hard and objectively at where they live now, and if they don't want to move for whatever reason, do their best to make it convenient and easy-care for the time when they may not be quite so fit, agile and active as they are now. A downstairs loo/shower room is an obvious idea. A shower rather than a bath. Landscaping the garden. Those kind of things.

Have a look at the SHIP site: https://www.ship-ltd.org

Best wishes

Margaret Clare

PS - Free bus pass, not always much use - I sent mine back a few weeks ago.