Equity Release guide discussion

Nick_Lovell

duncanthedog said:

When the time comes for me to get a new car I would like it to be 'all electric' but the only way I could raise enough (£25k) would be through a Drawdown Lifetime Mortgage.
I have no dependants so no worries about who gets my money so I would also use some of the house to pay for my end of life wishes upfront, up to about £3000 and if possible take a small income from the rest for home comforts.
Not a high value house at £85k but do debt connected to it at all and sound on the ground.

Does this sound like a workable plan? it would be somewhere about 3+ years down the road yet when I get to 65.

You should be able to release around £29750 based on the details above. So yes should be an option, will come down to property valuation and criteria relevant at the time.

TELLIT01

From the investigation I've done you should be able to get somewhere between 25% and 30% of the value of the property.  On the figures you give there would only be a couple of thousand pounds available after buying the car and paying for a funeral.  That won't give much of an ongoing income.

203846930

That won't give much of an ongoing income.

The ongoing income would just be a bonus, if I don't get much/anything, it would not cause me any grief.
The main thing is cash for the car, I did think about leasing a car and get the income accordingly but discounted that as a bit iffy.
Even the 'funeral' is well down the list, I have over-estimated what I would need as I have not priced that yet.

TELLIT01

We're in the same situation as you duncanthedog.  No dependants to worry about so we will investigate the various options, but almost certainly take money from the value of the house one way or another.  Members of the extended family are welcome to whatever is left when we pop our clogs or have to go into care.

Nick_Lovell

TELLIT01 said:

We're in the same situation as you duncanthedog.  No dependants to worry about so we will investigate the various options, but almost certainly take money from the value of the house one way or another.  Members of the extended family are welcome to whatever is left when we pop our clogs or have to go into care.

Makes sense - I am in the business of ER and will certainly be using my property wealth to use for making my retirement more comfortable and enjoyable.

Canadoug

I’m considering a lifetime mortgage but don’t like the idea of the house being sold by the loan company at the end. My plan would be to pay off the outstanding loan early to avoid the house being sold out from under our adult son who lives with us. 

Has anyone successfully done this?

Canadoug

As per my previous post I’m considering taking out a Lifetime Mortgage. I am concerned however that one of the acceptance clauses states that no business must take place in the premises. I would like to think that if the necessity arose I could at least take in a lodger or even do an Airbnb.
Does anyone have any thoughts on this please?

Canadoug

’m considering a lifetime mortgage but don’t like the idea of the house being sold by the loan company at the end. My plan would be to pay off the outstanding loan early to avoid the house being sold out from under our adult son who lives with us. 

Has anyone successfully done this

Nick_Lovell

Canadoug said:

’m considering a lifetime mortgage but don’t like the idea of the house being sold by the loan company at the end. My plan would be to pay off the outstanding loan early to avoid the house being sold out from under our adult son who lives with us. 

Has anyone successfully done this.

The lender does not sell the house. Your estate controls this - the only requirement is that it is sold in a 12 month period from the date the trigger event happens. Your son would inherit your estate as per your Will, he can then raise the funds to purchase the property via a mortgage, pay off the lender and he stays in the property. The only time this differs if you use a 'home reversion' plan which I would not encourage, and you sell part of the property to a provider - this is not a loan though and best avoided in my opinion. A lifetime mortgage is purely a first legal charge and you remain 100% the owners of the property. You can settle the loan early but ensure it is past the early repayment charge period to avoid this, typically between 9 and 15 years.

Nick_Lovell

Canadoug said:

As per my previous post I’m considering taking out a Lifetime Mortgage. I am concerned however that one of the acceptance clauses states that no business must take place in the premises. I would like to think that if the necessity arose I could at least take in a lodger or even do an Airbnb.
Does anyone have any thoughts on this please?

You can now get lenders to agree to lodgers and even Airbnb - not all of them like it, but there are certainly lenders that will consider this in today's market, so should not be an issue. I was only talking last week to a lender that will happily consider these type of scenarios.