possible equity release or selling

moneybags_3

Hi all

Don't know if this is the correct site for my question but if anyone can help, that's great. I am over 60 years of age and I have a very small mortgage left on my 3 bed terrace house. I have no one to pass my house to when I die. House sales where I live are very slow and I would never get back what I paid for the house. I was thinking about equity release or maybe trying to sell and renting a smaller place. I do not receive any state benefits as I have an occupational pension and I am due my state pension next year. Any opinions or advice would be welcomed

margaretclare

Not a for or against, but...we did equity release 10 years ago to pay off a £45K mortgage. We saw no point in going on paying a repayment mortgage which would have been paid off when we're 83, just in time to die and leave it to someone else. The £260 or so a month we were paying has been useful for other purposes.

If you do this, make sure the interest rate is pegged to the present bank rate which is at an all-time low. There have been horror stories of the interest rolling-up over a relatively short number of years and scaring people to death.

The other point is: you may be too young to do this as yet. One of us had to be 68 before we could do it, but that was 10 years ago, so things may have altered.

It's a serious decision so think seriously about it, the pros and cons, the 'what if's.

kidmugsy

moneybags wrote: »

I would never get back what I paid for the house.

Don't let that influence your thinking: what's done is done. Decide based on what you think might be best for your future.

Mojisola

As you don't have anyone to leave an inheritance to, it makes sense to enjoy your capital while you can.

One of the problems with renting is that you may find yourself having to move from one rental to another. Would that be acceptable?

Would your house be suitable for renting out? See how the sums add up if you rent it out and either rent a one bed place or go travelling or try some residential volunteering positions or buy a canal boat or whatever takes your fancy!

atush

kidmugsy wrote: »

Don't let that influence your thinking: what's done is done. Decide based on what you think might be best for your future.

I agree, but doubt this is the case unless the house was bought recently ie within the last 8-10 years

If you feel your house is valued so very low,l then you won't get very much equity release either.

I plan in selling/downsizing.

xylophone

Could you face the insecurity of renting?

Is there an area where you would prefer to live?

Perhaps you could consider selling and buying a one bedroom flat (ground floor/lift, near all amenities/ good transport links) in a better area?

Don't forget to make a will - you could benefit your chosen charity?

joerugby

The best way to release equity is to sell up and buy somewhere cheaper to live

Proxy

margaretclare wrote: »

If you do this, make sure the interest rate is pegged to the present bank rate which is at an all-time low. There have been horror stories of the interest rolling-up over a relatively short number of years and scaring people to death.

The other point is: you may be too young to do this as yet. One of us had to be 68 before we could do it, but that was 10 years ago, so things may have altered.

You can't get Equity Release interest rates pegged at any rate. Typically at the moment they're around 5.5-6.5%, which is higher than most standard mortgages because of the cost of the guarantees within the product. But that rate is fixed for life.

Also, you can take ER from age 55, but higher LTVs are available for older people.

It's a personal decision but you want to live in your current home then it might be the option for you. As always, consult an IFA.

margaretclare

Ours is, at present, 2.80% and it has stayed that way as long as the Bank Rate has been so low.

moneybags_3

Thanks for all the replies. I will have to read up about equity release. I would really prefer to move to another area, but I don't think that I would want to buy again at my age, however, private renting may not be very secure and as far as I can see some of these landlords are slow to carry out repairs. I do have some charities in mind that I would like to leave something too. I will be weighing up all pros and cons

jamesd

Say you're 65 now. Half of 65 year olds will live to be 88 or older. So half will be living in their new housing arrangements for twenty or more years. That can make buying say a ground floor flat with easy access a good deal to make life easier as you get older and might have more difficulty with stairs.

But why are you interested in selling or equity release? What's your objective?