Equity Release guide discussion

Candyce_2

I need some advice please or some signposting. I am over 60 and working full time, mortgage free and have a buy to let property. I want to build a retirement home abroad if possible. It'll cost about 150K. My home is probably worth at least 450K and BTL has about 250K mortgage. Will it be best to apply for equity release on either property or a lifetime mortgage or something else? Thanks in advance.

Nick_Lovell

Candyce_2 said:

I need some advice please or some signposting. I am over 60 and working full time, mortgage free and have a buy to let property. I want to build a retirement home abroad if possible. It'll cost about 150K. My home is probably worth at least 450K and BTL has about 250K mortgage. Will it be best to apply for equity release on either property or a lifetime mortgage or something else? Thanks in advance.

Couple of things here, equity release is only available to use against your main residence, if you intend to live abroad (more than 6 months a year) that negates using it against your main property. There is one lender who will lend against BTL but of course outside of FCA regs. It looks like though you have that BTL with a mortgage so not an option. If you have the income to support it, then look at a traditional mortgage against your main resi, then convert to a BTL if you intend to keep it once you have moved abroad.

Candyce_2

Nick, thanks for your reply. Useful clarification and some food for thought.

Tobleron66

I need some advice, My parents are about to release some equity in their house which is valued at 300k, the company have offered 55k at 7.4% and with compound interest and they would owe 116k after 10 years and 242k after 20 years. they don't have a choice as they have given up work to look after my grandad and savings have now dwindled. they will get some inheritance when grandad dies but as he already did equity release the amount will be around 30k. to be honest i cant see him going on for much longer as he is nearly 96 and not well. question is what sort of interest rate should they be looking at as 7.4% seems very high and could there be a better option that we have not seen. Any other companies worth checking out? TIA

Nick_Lovell

@Tobleron66Tobleron66 said:

I need some advice, My parents are about to release some equity in their house which is valued at 300k, the company have offered 55k at 7.4% and with compound interest and they would owe 116k after 10 years and 242k after 20 years. they don't have a choice as they have given up work to look after my grandad and savings have now dwindled. they will get some inheritance when grandad dies but as he already did equity release the amount will be around 30k. to be honest i cant see him going on for much longer as he is nearly 96 and not well. question is what sort of interest rate should they be looking at as 7.4% seems very high and could there be a better option that we have not seen. Any other companies worth checking out? TIA

That rate is high. £55k at age 55 is around 4.66% on a house value of £300k. I cannot steer you to the right company as it is in breach of the forum I believe. 

Tobleron66

Nick_Lovell said:

@Tobleron66Tobleron66 said:

I need some advice, My parents are about to release some equity in their house which is valued at 300k, the company have offered 55k at 7.4% and with compound interest and they would owe 116k after 10 years and 242k after 20 years. they don't have a choice as they have given up work to look after my grandad and savings have now dwindled. they will get some inheritance when grandad dies but as he already did equity release the amount will be around 30k. to be honest i cant see him going on for much longer as he is nearly 96 and not well. question is what sort of interest rate should they be looking at as 7.4% seems very high and could there be a better option that we have not seen. Any other companies worth checking out? TIA

That rate is high. £55k at age 55 is around 4.66% on a house value of £300k. I cannot steer you to the right company as it is in breach of the forum I believe. 

thank you for your reply, they are 64 and 74 would that make a difference?

Nick_Lovell

@Tobleron66 - the rates are based off the youngest borrower against the loan to value

Savvy_Sue

Tobleron66 said:

Nick_Lovell said:

@Tobleron66Tobleron66 said:

I need some advice, My parents are about to release some equity in their house which is valued at 300k, the company have offered 55k at 7.4% and with compound interest and they would owe 116k after 10 years and 242k after 20 years. they don't have a choice as they have given up work to look after my grandad and savings have now dwindled. they will get some inheritance when grandad dies but as he already did equity release the amount will be around 30k. to be honest i cant see him going on for much longer as he is nearly 96 and not well. question is what sort of interest rate should they be looking at as 7.4% seems very high and could there be a better option that we have not seen. Any other companies worth checking out? TIA

That rate is high. £55k at age 55 is around 4.66% on a house value of £300k. I cannot steer you to the right company as it is in breach of the forum I believe. 

thank you for your reply, they are 64 and 74 would that make a difference?

It would make a difference to my thinking, certainly. 

The first question will be whether your parents and granddad are all claiming everything they are entitled to:  Attendance Allowance for him,  Pension Credit for those in receipt of state pension, Carers Allowance for one of them, Council Tax benefit / discount if Granddad lives alone, if he lacks capacity then it can be reduced to zero, maybe other things - see if they can get a proper assessment from Age UK or similar. 

Then there's how long does the money have to last them? eg until the younger can claim state or occupational pension, or granddad dies. One has a definite answer, the other does not. 

Another question - to which there's no definite answer - is how long this situation will be sustainable for? is them caring for him in his own home going to be possible for much longer? 

Sometimes there's a need for brutal honesty, and this may be one of them.

PennyForThem_2

Any chance the 64 year old could go back to work?  Even part time?  That would mean extra income and they could contribute to a pension SIPP (and get free money contributed to it from gov!)

pennypowell

we are 69 + 73, still have an interest only mortgage to pay off but husband needs to retire from his physical business soon. We have done all the research into the benefits & pitfalls of equity release, discussed it with our children and decided that it was the best option for us. Mortgage is with Halifax, and they pointed us to Scottish widows (part of the same group). We had 3 long & tedious video calls with a young girl who asked a lot of repetitive questions about us & the property but not the important one. A survey was arranged, the surveyor agreed property was in a very popular & saleable area, but his report to SW said that the property was unsaleable due to overhead power cables within 70m of the property. We have since found that NO providers will accept properties with pylons and/or cables within the vicinity. Totally ridiculous situation - our next door neighbours sold recently at full asking price to the first viewers - but, unless the brokers find a provider who will take a different view we are stuffed. Any suggestion? Moving to Wales may be our only option