Drawdown equity release.

3stones

Hello all.

I'm interested your views re; drawdown equity release and wether this is a good idea or if you think I am barking.

Our situation is both 54 and working, i'm self employed in trades. No debts or finance outstanding never had a loan or finance other than mortgage in our life. If we didnt have the ready cash we always waited until we had. Just 20k mortgage {offset type) with a facility of £60k to go on a £460k house.
Joint DB pensions of approx 21k from age 60 with 37 years NI just a couple of missing years each to buy or work for.

Children financially independent so we have been looking at maybe releasing around £50k with an initial drawdown of around 10K to limit collateral damage and just to top up between now and the age of 67. We are not go mad types but it would allow just a few more options,
Our thinking is that although not our No1 priority if we never paid back the £50k it wont affect the estate too much as hopefully we live for a long time and the house in a nice area could well be £800k in 30 years time. Or as we reach state pension age at 67 our income will be approx £40k in today's money and we could pay the capital back if we wanted too or would that be just plain daft?

Thank you in advance feel free to label me a nutter:rotfl: if you like no offence will be taken

Cscott139

Do you need the 50k now?

djphig

I may be wrong as it was a while since i did the equity release qualification, but i don't think you'll get any lenders while you're both still 54 years old. Equity release is generally considered better for older people

Sea_Shell

Do you mean Equity release, or is it more a re-mortgage that you're after?

[Deleted User]

If you are happy to pay a small amount then have a look at Retirement Interest Only. It doesn't have an end date so is a lifetime mortgage payable on death of 2nd borrower, but the debt doesn't increase as you are paying the interest each month.

But I don't think you can do any of this until you are at least both 55 and over

3stones

Cscott139 wrote: »

Do you need the 50k now?

No not really but the gaping hole in our finances is that we do not have much in savings because we have always bought and paid for everything upfront. We agree that I need to drop down to around 30 to 40 weeks a year so that I can get on with our own house instead of everybody else's. We also have ageing parents that we would like to see more of and who are beginning to need some help.

I have seen draw down equity release from age 55 but i'm not really sure this is the product we need. I recently extended the term of the the current offset mortgage to age 70 and thought I could use the currently unused 40k as a draw down facility. Then settling the account at the end.

The way i'm thinking is it would be nice to benefit from a small percentage of equity in the house now drawing down very slowly on the agreed capital, Until we are 67 then stopping altogether as pensions would be enough. We are paying into additional ones now. Also if IHT changes we might as well benefit now rather the children getting clobbered for 40% on the excess. Like I said would like to leave them something but not going to go short ourselves to do it.
Can you pay off RIO mortgages and drawdown equity releases when you like. I have thought about about asking the children if they would like to pay us a small monthly allowance to protect their inheritence as they do alright, no such thing as a free meal in this house :rotfl:

3stones

Deleted_User wrote: »

If you are happy to pay a small amount then have a look at Retirement Interest Only. It doesn't have an end date so is a lifetime mortgage payable on death of 2nd borrower, but the debt doesn't increase as you are paying the interest each month.

But I don't think you can do any of this until you are at least both 55 and over

Interesting thank you, I will have a read-up on these. Can you do a long term fixed rate on these as well as have the option to pay them off early at a later date if you so wish..