MSE News Discussion: Should you equity release?

Former_MSE_Rose
Former_MSE_Rose Posts: 128 Forumite
edited 17 June 2010 at 4:20PM in Mortgages & endowments
This is the discussion thread for the following MSE News Story:
"[FONT=&quot]Many older people find themselves asset rich and cash poor - they’ve low incomes but valuable homes[/FONT]..."


Read the full story:
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Comments

  • Degenerate
    Degenerate Posts: 2,166 Forumite
    It worked for my grandmother. It made no difference to her estate, as if she had still owned the property it would have been sold to pay nursing home fees in the last few years of her life.
  • dunstonh
    dunstonh Posts: 116,342 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Speak to an independent mortgage broker. If you're seriously considering this, speak to an independent mortgage broker with an equity release speciality to find the best deal (see the Mortgage Broker Finding guide).
    IFAs also provide advice in this area. Although the specialist licence is typically required as well for them. Many advisers do not do it as its treated as a high risk advice area that is typically more expensive for the IFA to protect themselves on (so unless they do it by volume the cost may outweigh the benefit to the adviser). A check on the unbiased website allows you to show which IFAs will transact in that area and you can search by postcode to see your nearest ones.

    It is also generally considered an option of last resort. The marketing from the small number of providers left that still offer it may be positive and encourage it but you should expect an IFA to investigate all alternative options before recommending equity release.

    The transaction could remove your age allowance or pension credits and you need to be aware of the potential negatives.
    You typically have to be 60 to do it. Plus the younger you are, the less you can usually borrow.

    You can be as low as 55 nowadays. Although some providers start at 60.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • geoffky
    geoffky Posts: 6,835 Forumite
    never...a house is not a cash machine its a roof over your head and equity release was being used as a get out of jail card by too many people.
    It is nice to see the value of your house going up'' Why ?
    Unless you are planning to sell up and not live anywhere, I can;t see the advantage.
    If you are planning to upsize the new house will cost more.
    If you are planning to downsize your new house will cost more than it should
    If you are trying to buy your first house its almost impossible.
  • MSE_Martin
    MSE_Martin Posts: 8,272 Money Saving Expert
    First Post First Anniversary Combo Breaker
    dunstonh wrote: »
    IFAs also provide advice in this area. Although the specialist licence is typically required as well for them. Many advisers do not do it as its treated as a high risk advice area that is typically more expensive for the IFA to protect themselves on (so unless they do it by volume the cost may outweigh the benefit to the adviser). A check on the unbiased website allows you to show which IFAs will transact in that area and you can search by postcode to see your nearest ones.

    It is also generally considered an option of last resort. The marketing from the small number of providers left that still offer it may be positive and encourage it but you should expect an IFA to investigate all alternative options before recommending equity release.

    The transaction could remove your age allowance or pension credits and you need to be aware of the potential negatives.



    You can be as low as 55 nowadays. Although some providers start at 60.

    Hi

    I had actually written that in the weekly email

    "Speak to an independent mortgage broker. If you're seriously considering this, speak to an independent mortgage broker or financial advisor with an equity release speciality to find the best deal. See the mortgage broker finding guide."

    The news stry is generated from that but I think a slightly earlier iteration was used - it'll be corrected
    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
    Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.
    Debt-Free Wannabee Official Nerd Club: (Honorary) Members number 000
  • Equity release can also be good if all your children are better off than you and don't need your estate! "Spending the kids' inheritance" makes sense if they are well off but you are too proud to take their help...

    Equity release seems my best option, as I don't want to move but do need to realise modest amounts of cash over time. I want to find out how to take precautions if my circumstances change: I am thinking of remarrying but have not yet done so. My prospective new partner is younger than I am and has no assets, and I would want to leave her provided for if I die first.

    Does anyone know a good guide to Equite release that does NOT involve giving out my phone number??
  • Has anyone tried the "Home for Life Scheme" and how does this compare to equity release?
    Are there a number of companies offering the scheme and is it safe?
    What are the catches and should we be wary?
    Is there any safeguard to look for?
  • medicalman320
    medicalman320 Posts: 7 Forumite
    edited 12 September 2012 at 4:54PM
    My wife and I are 70 years old and own two houses on which we have small mortgages. We have pension incomes only.
    We would like to get our hands on some of the equity from one of the houses in order to improve and enlarge the other house so we can move in and make it our only property, selling the first one and settling the loan. We think we would need the money for about two years and then pay back the loan.
    We have no other available finance and cannot get a new mortgage, re-mortgage or personal loan because we are retired and have insufficient income.
    We need a sort of short term equity release plan but do not trust the regular 'till death' plans on the market.
    We cannot solve this problem although I would have thought it is a common one.
    Does nobody want our business? we are only too ready to do our bit for the construction and home improvement industry!
    Can anybody shed some light or ideas please?
  • I am now in a similar position, SANTANDER my mortgage company are only offering standard rate mortgages upon renewal to existing customers.
    But of course they offer exceptionally low rates to new borrowers, quite unbelievable really.
    My only option now appears to be equity release, run by the rather dodgey insurance industry, and pay an even higher rate of interest, if I want to maintain my current equity in the property.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Name Dropper Photogenic First Anniversary First Post
    paul.n wrote: »
    I am now in a similar position, SANTANDER my mortgage company are only offering standard rate mortgages upon renewal to existing customers.

    What was your plan to repay the mortgage?
  • medicalman320
    medicalman320 Posts: 7 Forumite
    edited 11 February 2013 at 9:05AM
    Hello
    The plan is to repay the mortgage on the second house in one total payment within one to two years from proceeds sale of the first house.We are prepared to make this a condition for any arrangement
    Thanks for your interest.
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