Equity Release guide discussion 26 June 2018 at 4:10PM edited 30 November -1 at 1:00AM in Over 50s Money Saving 145 replies 60.3K views

Penelope1647

What happens if one partner goes into a home when they have Equity release?

Nick_Lovell

If one partner goes into a  care home, then the other partner continues to live in the home as normal. There are 2 triggers for repayment - the sole surviving partner going into long term care or passing away. So it will have no impact whilst both partners are still alive if one goes into care the lifetime mortgage will continue. It should be noted that the local authority can only look at the remaining equity in the home when considering the ability to pay for the care.

Paulie61

Useful stuff nick, ive sent you a PM

rabialiones

is it possible to equity release on a private basis rather than going through the large companies
like a private loan

Nick_Lovell

lending is available in this sector from around 10 different lenders and over 300 products. To my knowledge this is the only form of lending options available - happy to advise further if  I can.....

missile

lynnechapman said:

Hello, I wonder if anyone can give me some advice at this turbulent time.
I am almost 69 and would really like to retire. To aid this we put our house on the market with the plan to downsize and release some money to allow me to do so (because of my work history I only have a tiny pension plus my state pension). Unfortunately however because of the present unpleasantness those plans have fallen through. So my question is - would now be a good time or a bad time to look at Equity Release?
Thanks Lynne

Think carefully and do your sums. My brother downsized and after legal expenses, stamp duty, removal costs, redecoration, curtains, carpets et al he released very little cash. On the plus side, a smaller property would likely have lower costs to run and maintain.

missile

Nick_Lovell said:

There are fees to consider but these can be added to the loan, as you will have to have independent legal advice.

Can you advise your fees? Fees seem to be much higher for equity release when compared to arranging a mortgage.

TELLIT01

missile said:

lynnechapman said:

Hello, I wonder if anyone can give me some advice at this turbulent time.
I am almost 69 and would really like to retire. To aid this we put our house on the market with the plan to downsize and release some money to allow me to do so (because of my work history I only have a tiny pension plus my state pension). Unfortunately however because of the present unpleasantness those plans have fallen through. So my question is - would now be a good time or a bad time to look at Equity Release?
Thanks Lynne

Think carefully and do your sums. My brother downsized and after legal expenses, stamp duty, removal costs, redecoration, curtains, carpets et al he released very little cash. On the plus side, a smaller property would likely have lower costs to run and maintain.

My neighbours hit the same problem when they considered downsizing.  They wanted to move from a fairly large 3 bed semi with a massive garden to a 2 bed bungalow.  The place they liked the location of required a lot of work and would have used up all the equity created by the downsize.  In the end they simply stayed put.

LoisLondon

I have been advised to consider releasing equity from my quite expensive home (no mortgage) using a Lifetime Mortgage, so I can top up my pension.  I am 75.  I don't need a lump sum, just some monthly (or annual) income, from which I could maybe pay some interest if that was a good idea.

I could approach my only child (married with own children) who is in a wellpaid, hopefully secure job, and suggest that an 'interest only' mortgage  coule be taken out on my flat (they have no mortgage, probably have savings too, and don't appear to have any expensive plans) with my child and I as joint owners maybe, to release some funds (though that would be a big lump which neither of us actually need)

I'd appreciate advice about whether this might be a workable idea, rather than me taking equity release as a Lifetime Mortgage.  Is there an alternative which would give me a regular pension top- up that I've not thought of, against the value of my home?

I'm unclear what the Inheritence Tax implications are in any of these cases, but that is probably a side issue and anyway not something I'm too bothered about because I won't be here!

Savvy_Sue

LoisLondon said:

I have been advised to consider releasing equity from my quite expensive home (no mortgage) using a Lifetime Mortgage, so I can top up my pension.  I am 75.  I don't need a lump sum, just some monthly (or annual) income, from which I could maybe pay some interest if that was a good idea.

I could approach my only child (married with own children) who is in a wellpaid, hopefully secure job, and suggest that an 'interest only' mortgage  coule be taken out on my flat (they have no mortgage, probably have savings too, and don't appear to have any expensive plans) with my child and I as joint owners maybe, to release some funds (though that would be a big lump which neither of us actually need)

I'd appreciate advice about whether this might be a workable idea, rather than me taking equity release as a Lifetime Mortgage.  Is there an alternative which would give me a regular pension top- up that I've not thought of, against the value of my home?

I'm unclear what the Inheritence Tax implications are in any of these cases, but that is probably a side issue and anyway not something I'm too bothered about because I won't be here!

I'd suggest both of you taking independent advice on this: it's not just inheritance tax, there are also potential capital gains tax liabilities when your flat is eventually sold (assuming it won't ever have been their main residence). Plus wellpaid secure jobs can vanish like the mist, and good health and stable marriages can disintegrate. 

There need to be a lot of 'what if' questions addressed.