equity release

lichtielass

hi all, new to the forum and hope i am in right place was just wondering if anyone can give me advice re my gran

My gran lived in new zealand for 3 years and also has had a brother over there 30 years, my gran is expressing wishes to go out and would go with her as she will be 79 this december. Now the thing is she does not want to move and wants to keep the house and has looked into this but if she takes some out the house then a lot of companys want to have the first right to buy when my gran passes and my gran would still like to keep the rights of house so family could buy first.

Can anyone advice me on this issue as really finding it hard as so many and don't want to suggest the wrong thing!!!

feel my gran should go to see her brother so anyone with any info and experiences that can share that would be great. thanks for reading

McKneff

How long does she intend to stay out there.
Is renting it out an option (even to any members of the family)
Is she looking for equity release to fund the trip.
Could she sell part of her house to any members of the family.

I'm really not a fan of equity release, there have been so many horror stories lately.

PasturesNew

If the family can club together to do a sort of private equity release, you'd all be better off.

It depends on your circumstances, how much, how much the house is worth, etc.

Pee

Equity Release isn't perfect as there is a company making a profit through lending the money with the interest rolling up. Your gran's estate will be a lot smaller should she need care in the future and also when she dies.

If she wants to go to new Zealand, this may be the only workable solution and so she might want to proceed. It's up to her whether she would be buying tickets for any other family members to go with her and help her. Be prepared for several family members volenteering, whether they have had much interest before or not, or critising her choices.

In the end it is up to her and she should shop around for a SHIP product and the one she feels suits her the best.

My feeling is that you only live once and if you help your children when they are young, by the time they are 30 they should be able to stand on their own feet and not expect anything further from you.

Obviously other people will feel quite differently about this.

missile

She does not have many years left and my feeling is she should enjoy it while she can. Equity release is an expensive way to borrow money, but then so is a mortgage.

McKneff

I think you'd probably find equity release would be a lot more expensive in the long run than a mortgage.

If you got 4 members of the family taking out say a £5k loan each, they would also be protecting their inheritance rather than giving it away to a company

Ian_W

Equity release has had a very bad reputation over the years but is now, at least, is regulated by the FSA.
SHIP (WEBSITE) represents most co's who offer ER and had it's own code of conduct even before regulation. There is plenty of info on the site which might help you decide if ER is the right thing to fund this trip.
There are 2 basic types:
1. A lifetime mortgage where the interest is rolled up and paid when the home is sold.
2. So called reversionary schemes where a % of the home is sold to a co but can usually only be realised when the house is sold.

HTH.

carefullycautious

What about a house swap. There may be someone wanting to work for say 12 months over here or longer. Not sure how to source relevant web sites. Can Pasturenew help?

missile

McKneff wrote: »

I think you'd probably find equity release would be a lot more expensive in the long run than a mortgage.

If you got 4 members of the family taking out say a £5k loan each, they would also be protecting their inheritance rather than giving it away to a company

Maybe so. Great idea in theory, but I would suggest getting 4 family members to agree to pay up would be a problem in most families.

lichtielass

thanks for all replys also she just wants to go for around a month i am going to pay for my ticket and some of her's for her 80th but she still wanting to take money out as she does not have the means to repay a loan and i myself would love to buy but not in a position at the moment and unsure if i would get a loan as work on month to month basis

Pee

It's harder than you would think doing a private equity release, though. Even though in theory it's a good idea.

Plus it could, depending on the personalities involved, be an issue of independence - even though I agree with you in theory, McKneff.