Equity Release.

WoodruffsDad

An acquaintance is struggling with debt. He is past retirement age but still working when he can find any. He owns his own house and is married.

People, probably well-meaning, are pushing him in the direction of Equity Release, whatever that might be!

What are forum members views on this?

[Deleted User]

I don't know enough about equity release, or his circumstances, to comment.

But as he is struggling with his debts, he would probably benefit from speaking to one of the debt charities for free impartial and non-judgemental advice, as they would not only be able comment on his specific situation but also be able to advise on all the options open to him objectively.

Try CAB, CCCS, National debtline

HTH

D9

Hannah_10

Further to what Domino said see this Debt Problems: What to do & where to get help

woodruffsdad_2

My acquaintance has got it into his head that equity release is his way forward.

I know nothing about equity release which is why I asked this question on his behalf.

tallyhoh

my father in law took a form of equity release "basket of choices" (dont make me laugh). He had £20,000 in 1996. When he went into a nursing home in 2006 the £20,000 had turned into £74,000 owing, wiping out any equity in the property. Interest was added every year & then interest charged on the interest.

Depends on your friends circumstances, is there anyone else living in the property?

NeverAgain_2

I have also heard of horror stories from these equity release schemes.

The customer seems to end up with only a small proportion of his equity.

Better to sell the house and move into a smaller one, or even move into rented.

That way, the OP's friend will get access to every penny of the value of his house.

tangyfog

As I remember it is to do with setting up a contract where the house become a secured asset under the release company who then rent the house back to you. They give you X amount for the house and you pay rental and some interest. But I just remember these companies being really shady to deal with!

tallyhoh

tangyfog wrote: »

As I remember it is to do with setting up a contract where the house become a secured asset under the release company who then rent the house back to you. They give you X amount for the house and you pay rental and some interest. But I just remember these companies being really shady to deal with!

It can be but the more usual is too loan (or give) you money against the house. In my FIL case he was "loaned" £20,000 which he did not have to repay until the house was sold. Although he made no repayments interest was added each year, the following year interest is added again & interest is also charged on the previous years interest.

Affectively after a few years there is no equity left.:eek:

ianhowarth

Hi, I'm a specialist ER adviser. ER is NOT suitable for everybody but for some people can be a lifeline. Horror stories are sadly what everyone will tell you about however you will not hear about the tens of thousands of people who take these schemes out every year which hugely increase their standard of living. The 'good' schemes are very heavily regulated and have legal guarantees to enable you to live in the home for the rest of your life and the guarantee that you cannot pass any debt onto your estate when you die. I would urge you to look at the SHIP (trade body to protect ER customers) website for more information and also seek specialist advice from an Independent ER specialist. Of course there are downsides to the plans but a good experienced adviser will go through both the positives and negatives with you, as well as the cost implications. Hope that helps. Ian.

RAS

Ian

Glad you made your professional background explicit in your post, but if it took me 20 seconds on google to identify your employment details, you need to get MSE Towers approval before posting and probably a new user name.

Hannah_10

Personally I prefer to take my advice from someone with no vested interest in selling me a particular solution. Someone like National Debtline or the CCCS.