Equity Release Options

mickcol53_2

I am 58, my wife is 55 and have a mortgage of £60K to be paid off on my 70th birthday. The house is worth between £300K and £330K, Due to temporary unemployment we need to pay credit card debt bills and want to raise finance for living. We can downsize but this will take months. Can we use some form of equity release to for example sell 10% of the house value and raise cash that way? We would then want to pay them 10% of the house value when sold, e.g. in 3 to 6 months. We dont want to give the equity release company the value on death, i.e. we want to sever ties with them when this house is sold. Failing this, any suggestions? Note that a remortgage (with N Rock) is not likely as they are an asset management company now.

holly_hobby

Any age related equity release scheme, which requires no monthly repayment, willl generally have substantial early redemption pens, and isn't really designed for short term finance, but longterm residence security for the individual, whom are asset (ie property value) rich but cash poor.

In selling a % of the property, you are talking about a home reversion scheme ( a variant under the age related equity release banner), generally min age of 65 I am afraid in any event.

Both can have weighty early exit fees (some app fees too, with the incurrance of legal fees to complete the mge transfer - and although generally designed to be redeemed on death or entry into long term care, they may be also be concluded by the sale of the property and due payment to the provider of the agreeed sum/% of selling costs.

So neither are really suitable I am afraid at this juncture, particularly relating to the incurred costs, for your very short term (3-6 mth) requirements.

If you elect to remain in the property - they may be more suitable to your needs.

N Rock are your current lender, whom you can not approach for a further advance. Have you thought about approaching your bank for a short term loan secured on the property (if your income is insufficient to service) ? 2nd charge would require the permission of N Rock, but maybe an alternative, and although traditionally they will look at income to service, if you explain the circs, LTV and your plans to sell, they may be able to lend on mandate. If you hold a good and historical relationship with them, may be worth a chat ?

Hope this helps

Holly