Equity Release

JacquieH_2

Not sure if this is Mortgage related or pensions....so I have posted on both forums!
I can't find much on this website about Equity Release/Lifetime mortgages. I have a house currently valued over £400k (was £450k before credit crunch!) built on my late parents land and partly funded by their inheritance to me.
I have no mortgage, no children, no husband, no savings and no pension plan and an income of only about £18k a year now. I am self employed and also part-time employed!
I have 2 loans to pay off (total £20k) which are costing me £550 a month... so I have very little, disposable income each month!! I have been trying to sell my house to release some equity but to no avail....and actually, I love it and would prefer to stay if it were possible (having built it myself 5 years ago!).
I am 55 in March and have been looking at a Lifetime Mortgage @ 6.8% APR through an Equity Release scheme plan from Aviva. The house remains 100% mine and the plan is portable. I only want £30k to pay off loans and buy a decent vehicle.....and maybe my first proper holiday in 10 years!!!! Does anyone have any knowledge of these plans??

Trollfever

This is a guide from the FSA:

http://www.moneymadeclear.fsa.gov.uk/products/equity_release/equity_release.html


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VIGILANT22

JacquieH..In addition to reading up on this.....You should discuss with a mortgage advisor who is Equity Release qualified and is whole of market.....Discuss all you options including options other than ER...You may find other options at this stage may be more attractive as you are quite young to be entering into ER...

JacquieH_2

Thanks for that ....but it seems the only option that doesn't involve monthly payments and my equity is quite substantial....to say the least!!
The quote I have had which allowed for only a 1% increase in house value (my input) over 10 years started with £375k equity and in 10 years I still had £417k...after releasing £25k . Seems a no-brainer to me....but also too good to be true!

EdInvestor

More info here: www.ship-ltd.org
hip memembers observe safe

Ship members observe safeguards for borrowers.

There appear to be no obvious losers from the idea, given your assets are high, needs are low and you have no dependants or heirs

Aim for max flexibility on moving the loan to a better deal later as this market is likely to develop in the future.