Age Partnership Equity Release

davidscot

Hi all, not sure if posting in the correct forum but giving it a go.
Anyway I was wondering if anyone could help here first before I go submitting my details and being bombarded with calls etc. Seen the advert for Age Partnership Equity Release and wondered if any other posters here have dealt with them and did they have success or not. Could be a case of looking into this matter a little bit more but just wanted to pick others brains before I gave out my details as I said.
What does it involve, any pitfalls, benefits, in fact any information at all would be gratefully received

Kynthia

As you've had no responses yet, it might be worth trying the Mortgages section of the forum. During working hours it has some mortgage brokers on there, some of whom might be knowledgeable about equity release.

bigadaj

davidscot wrote: »

Hi all, not sure if posting in the correct forum but giving it a go.
Anyway I was wondering if anyone could help here first before I go submitting my details and being bombarded with calls etc. Seen the advert for Age Partnership Equity Release and wondered if any other posters here have dealt with them and did they have success or not. Could be a case of looking into this matter a little bit more but just wanted to pick others brains before I gave out my details as I said.
What does it involve, any pitfalls, benefits, in fact any information at all would be gratefully received

First up, how old are you, what is the value of the property and is it unencumbered.

You actually need to be quite elderly with significant equity for these products to be anywhere workable, even then they tend to be expensive but may be worthwhile for some.

Linton

I suggest that you deal with a suitably qualified local IFA/mortgage broker rather than a national company. You are more likely to get friendly personalised advice rather than being sold something. If you look on the Age Partnership website in the careers page you will see that their equity release advisors have a lowish salary and high OTE.

As bigadaj says your current age is a major factor as it will determine what % of your equity you could get. Expect around 25-30% in your 60’s rising to perhaps 50% in your 80’s.

To answer your questions would take more than a quick posting, which is why you need to talk to an advisor.

The main type of ER these days is a lifetime mortgage which is like a standard mortgage with the key difference that instead of being a fixed term, it lasts until you die or permanently enter a care home. At that point the house is sold and the outstanding debt paid off. Any equity remaining is returned to you or your estate. If there is insufficient equity to fully repay the mortgage the loss is borne by the insurance company. It isn’t charged to you or your estate. Because the insurance company is taking extra risks the interest rates are rather higher than with a standard mortgage.

There are two forms of lifetime mortgage. If you were using it to trade up for a better house then an interest only option is available.

Alternatively if you needed the cash to live on the interest can be rolled up into the mortgage. Thanks to the magic of compound interest this leads to a rapid rise in the size of the mortgage, which is why your age determines the % you can borrow.

If you have any specific questions I may be able to answer them, having been through the process to finance an up-sizing.

davidscot

Thanks for the tips so far. Answers to a couple of questions are I am 56 and value of property would be roughly £175k.
Stupidly entered my details and that's 2 phone calls from them already trying to push this through

Linton

56 is too young to be considering ER unless (very) perhaps you had special circumstances. Even at 60 which is the youngest eligible age for one of the major companies in ER you would only get about 20% - £35K.

Mnd

One point to bear in mind is that you can stagger the payments..eg 20k every 4 years, this is what we are planning to do, but not yet.I'm 63 and my wife is 57 . She still works and ER is 1 tool we are considering to bridge the gap between her retirement and her state pension

OldMusicGuy

My FiL did equity release in his 70s and regretted it when he sold his house aged 88 to move into a flat. The gain the equity release company made was significantly greater than the amount he took out of the property. His advice to you would be "don't do it".

davidscot

Linton wrote: »

56 is too young to be considering ER unless (very) perhaps you had special circumstances. Even at 60 which is the youngest eligible age for one of the major companies in ER you would only get about 20% - £35K.

Thanks for making me feel young No special circumstances and if I was only releasing £35k not even considering it.
Oh well guess I will need to fend off the telephone calls and try get them to remove my details

merrydance

Hi Linton


There are two forms of lifetime mortgage. If you were using it to trade up for a better house then an interest only option is available.

Re the above - we took out equity release on our property with the cash to live on option. We pay the interest every month, plus a bit extra so it does not roll-up. You do not have to move house for this option.

Linton

merrydance wrote: »

Hi Linton


There are two forms of lifetime mortgage. If you were using it to trade up for a better house then an interest only option is available.

Re the above - we took out equity release on our property with the cash to live on option. We pay the interest every month, plus a bit extra so it does not roll-up. You do not have to move house for this option.

It seems somewhat perverse to pay a relatively high interest rate for a large lump sum to use to for cash to live on as the drawdown amount you take from the lump sum will have to Include both the interest and the extra income you need to live on.

Looking at the numbers, say the i/o interest rate is 4%, and you take 5% as extra income you will have exhausted your pot in about 11 years. Then what? You still have the interest to pay. Or do you plan to switch to roll-up at that point and go back to the lower income you started off with? What is the advantage vs going for roll-up for a smaller lump sum that could be used to supplement your income without in addition having to pay the interest? The key problem I see is that the interest on its own may exceed the sustainable return you can get by investing your lump sum, without giving you any extra income.

It may well all make sense in your circumstances, but it would be interesting to see the justification.