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What are pitfalls to Equity Release
Comments
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There was a woman on our local news a few weeks ago who got stung by one of these types of schemes.
Basically she sold her house to one of these companies then rented it back, BUT what she didn't know was that to pay her the company has to take out a mortgage on the property, they went bust & the mortgage didn't get paid so her house was repossessed by the bank.
Be very careful of these companies & make sure you have ALL the facts before you decide to go ahead, personally I wouldn't touch them with a 10ft bargepole.Winnings
01/12/07 Baileys Cocktail Shaker
My other signature is in English.0 -
Im not sure that is the case. If posts on this forum are anything to go by, then many people dont appear to realise that there is a difference in the rules relating to IHT and local authority care provision.It is really amazing how many people appear to have been "advised" by solicitors to sign over property to relatives to avoid care costs and IHT, without being told about the 'voluntary deprivation of assets' and 'gift with reservation of benefit' rules, not to mention that the recipient will incur capital gains tax when the property is sold.
How many times have we seen people on here quote IHT allowances and gift rules that relate to IHT when they are talking about local authority care and vice versa?
Tenants in common would probably work if it was with the spouse but with son/daugher there is no justification for doing it other then deprivation of assets.There was a woman on our local news a few weeks ago who got stung by one of these types of schemes.
You are mixing up sell to rent and equity release. They are different things.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
LuciferTDark wrote: »Basically she sold her house to one of these companies then rented it back, BUT what she didn't know was that to pay her the company has to take out a mortgage on the property, they went bust & the mortgage didn't get paid so her house was repossessed by the bank.
This is NOT what is meant by 'equity release'.
With equity release you do not pay rent for your own house. You remain in possession, no different from an ordinary mortgage except that you don't have to make repayments in your lifetime.
I agree that selling your house and renting it back is the worst possible idea.
Margaret[FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
Before I found wisdom, I became old.0
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