Equity releasing a property to retire

kidmugsy

mgdavid wrote: »

And of course, don't forget that these Equity Release companies are not founded out of charitable benevolence to our aged population, they exist to make profit for their directors and shareholders, lots of it!

The swine! How very dare they! I think you'll find that most people don't work out of charitable benevolence but to profit by it.

Lukeduke

Thats probably the ONE thing we are very aware off, whoever the company is they are in it for one thing, and one thing only!!!!

greenglide

Lukeduke wrote: »

My parents get a state pension, and have full time jobs at this time, the retirement plan is to maybe do 2 or three days a week to keep the bills paid

So basically they are living in a house that they can't afford as they have an outstanding mortgage after State Pension Age that they won't be able to service but they don't want to downsize?

I suspect they will have to wake up, smell they coffee and accept that downsizing / moving to a less desirable area may be they only option.

We haven't been told how they got into this mess but, realistically, there are few alternatives better than moving.

Proxy

PeacefulWaters wrote: »

Google "equity release nightmare".

I'd guide them towards selling up, buying an affordable home for £150k and keeping a few thousand back for savings.

Google "washing machine nightmare", "HSBC nightmare", "polish railways nightmare"

The internet is a scary place if all you want is scaremongering.

Seek independent advice.

PeacefulWaters

Proxy wrote: »

Google "washing machine nightmare", "HSBC nightmare", "polish railways nightmare"

The internet is a scary place if all you want is scaremongering.

Seek independent advice.

I think you need to consider context with your comparisons.

If HSBC mess up your direct debit or you get stuck overnight at a Polish railway station it tends not to ruin the rest of your life.

There is a place for equity release but going into it without understanding the potential negative consequences that can severely damage the rest of your life is a bit different to being diverted through multiple far eastern call centres if your bank account has a problem.

If you're considering equity release you really should research the worst possible outcomes before making a well informed decision one way or the other.

I'm sorry you didn't like my post. But there is a massive lifestyle decision to make here.

kidmugsy

Lukeduke wrote: »

Thats probably the ONE thing we are very aware off, whoever the company is they are in it for one thing, and one thing only!!!!

Just like you, in fact.

gterr

zagfles wrote: »

I presume the company will just pay off the mortgage, rather than giving them a lump sum as well?

£160k plus 20 years interest at 4% will be over £350k. And I'd imagine they'd want more than 4%. What would happen if one or both of them lived to point where the money owed to the equity release company was close to the equity in the house?

Most (if not all) of the equity release schemes now come with a guarantee that would mean that in this case the couple could remain in the house for as long as they lived (until second death) or until the last of them went into permanent care. At that stage the house would be sold, and if there was equity left in the house after the equity release mortgage had been paid off then this would go to their estate. If the couple lived long enough that there was negative equity in the house then that's hard luck on the equity release firm. However, the firm may well be expecting some rise in property values as the years go by, which would help offset the risk of negative equity.

Proxy

PeacefulWaters wrote: »

I think you need to consider context with your comparisons.

If HSBC mess up your direct debit or you get stuck overnight at a Polish railway station it tends not to ruin the rest of your life.

There is a place for equity release but going into it without understanding the potential negative consequences that can severely damage the rest of your life is a bit different to being diverted through multiple far eastern call centres if your bank account has a problem.

If you're considering equity release you really should research the worst possible outcomes before making a well informed decision one way or the other.

I'm sorry you didn't like my post. But there is a massive lifestyle decision to make here.

Hence seeking independent advice.

I agree there is a massive decision to be made but looking around for scare stories is not the way to provide balanced research. For a start, half of the articles on that particular google search are at best biased/misleading, and at worst factually incorrect.

Unbiased advice is needed, not scaremongering.

mgdavid

Proxy wrote: »

...... For a start, half of the articles on that particular google search are at best biased/misleading, and at worst factually incorrect.
Unbiased advice is needed, not scaremongering.

Please tell us which half...

sleepless_saver

As the amounts involved look a bit improbable for equity release unless your parents are very elderly, are you completely sure that someone isn't trying to sell them a sale and rent back scheme? (This would be the worst of both worlds as they would no longer own the property and would not necessarily be able to remain there as long as they wanted).