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Equity Release guide discussion

edited 30 November -1 at 12:00AM in Over 50s Money Saving
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  • edited 13 November 2019 at 7:16PM
    hj711hj711 Forumite
    64 posts
    Ninth Anniversary Combo Breaker
    edited 13 November 2019 at 7:16PM
    An Update to my original post. I took out a lifetime mortgage in October. I was very pleased with the exceptional advice I received from my FA and the fees were only for the legal papers to be drawn up. My FA did not charge a fee, nor did her company or the mortgage lender. I saved £1600 on using this company. It has given me peace of mind and I am sleeping much better too! If you would like more info please pm me and I will advise if able to. I am not able to give you the name of the companies I used here, but suffice it to say for now, that the advice I received was excellent. My children are fine with it too, in fact they are worrying about me less and I can now treat the grandchildren to things which before I would have thought how nice to be able to buy them a toy or an outfit but couldn't .. now I can and that makes me happy! :-) I am being sensible of course but it is a big patch of breathing space! 2 friends have taken it out too and are so pleased also.. again they did it for various reasons.. one to get an extension on her home and another to add to her pension and ease the financial burdens.

    Everyone is going to have their own reasons for considering ER and I would not let the media put you off if it is something that you see as a means of making your life easier. You will be given very clear guidelines into what you borrow and the amounts to be repaid when you die or go into full time permanent care. No stone was left un-turned and every question I had was answered in a concise and easy to understand manner. I felt very confident and still do that I made the right decision for me! Everyone who considers ER must be sure it is for them.. and with the right advice you will be able to make an informed decision.. they are highly regulated now by the Financial Services Commission and the bad press they received years ago when this first began is a thing of the past. Yes in a perfect world I would have preferred not to have done but it is not a lot different to a regular interest only mortgage.. when I stop and think of all the money that my ex spouse and I paid out on the various interest only mortgages over the 38 years it would be far more than this is going to cost me!
  • hj711hj711 Forumite
    64 posts
    Ninth Anniversary Combo Breaker
    Tigerrod wrote: »
    The advantages of a Drawdown Lifetime Mortgage are summarised in the MSE Guide. I would like to know if anyone has any experience of taking a 2nd+ Drawdown from their Reserve. If so, did the interest rate applied seem reasonable compared to the rate set for the initial Drawdown, for the amount being Drawn down, and in the prevailing interest rate climate? I am concerned that an attractive lower rate for the initial Drawdown may be the carrot that pulls the Borrower into an arrangement where the Lender could charge unreasonably higher / extortionate rates for subsequent Drawdowns. Thanks
    I took out equity release (lifetime mortgage recently ) as yet I have not spent all that I took initially so have not used the draw drown facility .. but it will depend on what the interest rate is at the time of course when I do. A friend of mine took out ER 2 years ago and she said the interest rate was lower this year at less than 3% .. whereas when she took her ER out it was much higher.. so for her it was a good thing. You do have to keep an eye on the interest rates and it is a gamble but if they have been at 2.60% for 3 months let's say, it is unlikely they will go down any lower but of course could suddenly shoot up.. if they are low now then strike whilst the iron is hot.
  • hj711hj711 Forumite
    64 posts
    Ninth Anniversary Combo Breaker
    would equity release companies take on a property which , although we have lived in it since 1990 , have only just managed to register last year with the land registry under a possessory title as we have lost the original deeds.
    Even though we have provided evidence of occupation , original plans for conversion drawn up by me and submitted and passed by local council in 1991:, original sales literature from vendor , solicitors receipts for sale of property , bank statements showing sale , etc ,etc , but not enough to satisfy the land registry.
    After £1400 solicitors fee that's what we end up with, presumably no E R firm would entertain us ?
    Hi I don't know if you managed to find out anything .. ? I would not have thought ER would have had a problem with it personally ... as long as the property is registered and is not a park home or retirement place, they will lend on most as far as I know.
  • Suppose you die and your estate goes to your child who is living in your house and who wants to stay. I understand he would have to pay off the provider (the loan + interest) but if he is not able to what are the possibilities.
  • Savvy_SueSavvy_Sue Forumite
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    Part of the Furniture 10,000 Posts Name Dropper
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    harv99 wrote: »
    Suppose you die and your estate goes to your child who is living in your house and who wants to stay. I understand he would have to pay off the provider (the loan + interest) but if he is not able to what are the possibilities.

    Exactly the same as if there was an outstanding mortgage with no ER, surely? Either take on the outstanding debt, or sell and move.
    Still knitting!
    Completed: TWO adult cardigans, 3 baby jumpers, 3 shawls, 1 sweat band, 3 pairs baby bootees, 2 sets of handwarmers, 1 Wise Man Knitivity figure + 1 sheep, 2 pairs socks, 3 balaclavas, multiple hats and poppies, 3 peony flowers, 4 butterflies ...
    Current projects: pink balaclava (for myself), seaman's hat, about to start another cardigan!
  • Savvy_Sue wrote: »
    Exactly the same as if there was an outstanding mortgage with no ER, surely? Either take on the outstanding debt, or sell and move.
    Thanks, that makes sense.
    Is there in general a time limit on when to pay back the outstanding debt.
  • Ive noticed that the help to buy calculator monthly mortgage payment calculation does not take into account fixed term periods and paid off equity when they use the higher rate of interest for calculating debt to income ratio . The calculator assumes the higher rate of interest is being paid from day 1. For example , the monthly repayment fee in the calculator is £810 vs reality of £750 once 5 year Fixed term interest has finished . Therefore in some cases the 45% debt to income ratio based off their incorrect per my example above.

    Can any one advise what happens if someone is rejected for the funding before exchange of contracts if the monthly payment in the calculator is higher than what’s stated on the mortgage offer? Thanks
  • Savvy_SueSavvy_Sue Forumite
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    harv99 wrote: »
    Thanks, that makes sense.
    Is there in general a time limit on when to pay back the outstanding debt.
    Honestly no idea.

    If you're the one considering ER, you need to read and understand all the small print and take proper unbiased advice. If you don't want the survivor to be forced out of their home, this may not be the right scheme.

    If you're the survivor or potential survivor, there may not be much you can do beyond being aware and planning ahead. It's the homeowner's decision. If they're still just considering it, see above.
    Still knitting!
    Completed: TWO adult cardigans, 3 baby jumpers, 3 shawls, 1 sweat band, 3 pairs baby bootees, 2 sets of handwarmers, 1 Wise Man Knitivity figure + 1 sheep, 2 pairs socks, 3 balaclavas, multiple hats and poppies, 3 peony flowers, 4 butterflies ...
    Current projects: pink balaclava (for myself), seaman's hat, about to start another cardigan!
  • badmemorybadmemory Forumite
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    1,000 Posts Fourth Anniversary Name Dropper
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    It's a great thing to do if you dislike your neighbours. If I had known that the property was up for auction I would have bought it myself. The property is larger than mine with more land than mine, but sold for a lot less than my next door neighbours (smaller than mine) did only a few months before. Just because the inheritors were greedy & wouldn't accept an offer so the equity co eventually took over (can't say I blame them really in their position I would probably have done the same) & the auction price was £35k less than the offer they refused.



    It has seriously devalued all our properties. Next door are trying to sell & they get buyers for the real value & no-one can get a mortgage for enough because of this! So they are unable to sell!
  • TELLIT01TELLIT01 Forumite
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    I'm aware many lenders have a minimum fee, or percentage charge. In the case of a drawdown mortgage I'm assuming the full fee would be payable in the case of a minimum fee, but in the case of a percentage charge would that fee be on the amount available or the amount of each drawdown?
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