HELP me to help my parents

andrew28

HELP me to help my parents

My parents (72 and 68) need more funds to top up living they are too active to sell up and live in a warden assisted home

They really want to stay in their home for as long as possible

So they have asked me to investigate releasing equity from the home?

I know nothing about this?

I certainly do not want to take the advice from companys advertising

I am sure there must be a money savers inside line of the best way to go about this

Regards

Andrew28

Savvy_Sue

There is a recent thread here from which I deduce that Martin's written an article about equity release. You'll find that on the lh side of the screen.

The other thing to suggest to your parents is that they broaden their minds about warden controlled homes! There are lots of different options out there, from schemes where you can only buy if you're over a certain age and there's no warden provision, to rented schemes where the warden will call every day, but not if your parents don't want the call, to very sheltered housing which combines the best of your own accommodation with the help you might need in later life! Some of them were described here and possibly here.

Might depend what's available in your area, but it's all happening!

andrew28

Sue

Where

Andrew28

seven-day-weekend

Are they claiming any benefits and allowances they may be entitled to?

http://www.entitledto.com/

Savvy_Sue

andrew28 wrote:

Sue

Where

Andrew28

Sorry, where what? If you click on the links I posted you'll find the recent discussions, I don't know where Martin's article is exactly - haven't needed it myself.

If it's 'where are all these fantastic properties for the over 60s?', availability varies across the country. If you said where your parents are - or might want to be - people might be able to make suggestions.

Ted_Hutchinson

FINANCIAL SERVICES Authority
For more detailed information about the different types of scheme available, how they work, and other things you need to think about:

• visit our website section Equity release - raising money from your home; or
  
  
• download our free pdf factsheet Raising money from your home (20 pages)
• download our campaign leaflet Thinking of raising money from your home? (6 pages)
  
  (pdfs open up in a new browser window, right click on the link to save the file to your pc)

You can also get a printed copy of the factsheet free of charge from our Leafletline on 0845 456 1555* (Call rates may vary)



My own view of these plans is somewhat sceptical unless you are quite old and not expecting to live very long. I'm concerned about how rises in interest rates could make these plans very very expensive. I'm also concerned that house prices could drop significantly and cause problems at a later date. But I'm aware that there are other posters on the forum who I otherwise regard as eminently sensible who have opted for this route and are most satisfied with the result.


I think if I as a son and my parents were considering this at age 72&68 (if alive) I think I might wonder if there was a better alternative and perhaps consider buying a share in their current home to enable them to manage and retaining in the family the families assets.

Have they considered simply downsizing? Buying a smaller property. I don't think the Warden/sheltered housing is the only scheme. Much as I hate the modern prefab, the PARK HOME, I do see that having a small property with a small garden may be an attractive option for some. No wardens but still management fees and rather too close for comfort neighbours for me.

Dora_the_Explorer_5

Martin talked about equity release in his slot on the One Show last Friday. He took a case of someone aged 60 and pointed out that if they did an equity release for (I think) £50k they would owe c£200k in 20 years time becuse the interest is compound. Not a wise move for that person.

bud-miser

Equity release is a dodgy bandwagon upon which lots of equally dodgy, get-rich-quick companies are currently riding.

Before you make ANY move in that direction, surely a wise move would be for you to conduct a thorough, MSE-type audit of their income and outgoings. The extra money they need may well be found there.

in_my_wellies

Are you the only child or have you siblings? It depends how much they need but I would be tempted to pay them a monthly allowance so you keep the value of the house, however, I don't know about the implications if they went into a home and had to sell the house topay fees.

margaretclare

in_my_wellies wrote:

Are you the only child or have you siblings? It depends how much they need but I would be tempted to pay them a monthly allowance so you keep the value of the house, however, I don't know about the implications if they went into a home and had to sell the house to pay fees.

I believe you mean well but....I'm in the age-group being discussed, and as an independent 71-year old happily-married woman, I can say without fear of contradiction, that hell would freeze over before I allowed any family member to 'pay us a monthly allowance so that they kept the value of the house'.

Anyone considering equity release should visit, as their first stop, the SHIP website (safe home equity plans). https://www.ship-ltd.org

There's a lot that can be said about this idea, for and against. Basically it depends on what the people themselves want. For us, we wanted to be free of the existing mortgage and to have the £260 a month that paying off that mortgage gave us. We weren't bothered about leaving inheritances to other people, we just wanted to be certain of a roof over our heads for as long as we need it, and we were guaranteed that. We'd have been paying the existing mortgage until we were 83 - we were 68 when we did the equity release, 3 years ago. The valuation of £140K then has jumped to £165K now, especially since we got the roof replaced earlier this year. You can argue about whether the interest rolling up will/will not match the increase in property values, this is an unknown factor. It's a serious decision which needs proper consideration and like marriage, shouldn't be taken in hand lightly!

Best wishes

Margaret

margaretclare

Savvy_Sue wrote:

If it's 'where are all these fantastic properties for the over 60s?', availability varies across the country. If you said where your parents are - or might want to be - people might be able to make suggestions.

'Fantastic properties for the over-60s'? McCarthy & Stone are building like there's no tomorrow, and they advertise these extensively - perhaps they think these come under the heading of 'fantastic', but (a) they're expensive and (b) all such developments marketed at older people, whether in the private sector or council- or housing association owned, could be classified as 'old people's ghettos'.

Depends what you want, of course! We live in a 2-bedroom bungalow with young couples on each side of us. No way would we want to live completely among our 'own age-group'. We haven't got much in common with most of them anyway, apart from a date on a calendar - we can't stand the constant whingeing.

When we did equity release 3 years ago it wasn't that we needed extra income, but we didn't want to keep paying a mortgage until we were 83 for someone else to benefit from. We're not bothered about leaving an 'inheritance' behind us. We didn't actually need the £260 a month that was freed up, but it comes in useful for things like roof repair, boiler replacement next spring, our trip to Niagara next July, things that might have been a squeeze otherwise!

Margaret