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Mortgage or,Equity Release?

Miss_Trouble
Miss_Trouble Posts: 7 Forumite
Part of the Furniture First Post Combo Breaker
in Mortgages & endowments
Which is best please?
House worth £425 k.
Need about £60k to modernise.
Don't want to dip into savings.
What is my best option?
Current mortgage..£200 left to pay

Retired with fixed income
Thanks

Comments

  • MWT
    MWT Posts: 10,784 Forumite
    10,000 Posts Sixth Anniversary Name Dropper
    The challenge with equity release is you would have to clear the existing mortgage as well at the same time, so could you confirm how much is outstanding?  If it really is '£200' then that isn't a problem, but just wanted to check it wasn't a typo... 
  • Miss_Trouble
    Miss_Trouble Posts: 7 Forumite
    Part of the Furniture First Post Combo Breaker
    yes really £200
  • MWT
    MWT Posts: 10,784 Forumite
    10,000 Posts Sixth Anniversary Name Dropper
    Then you have options depending on age, income and condition/type/location of the property.
    Can't say which is best without a lot more information, so given that you are retired and considering equity release as well as mortgage options I'd suggest you talk to Step Change Financial Solutions.
    They will not charge you for their services and taking advice for equity release is mandatory, and most others will charge for that advice.
    They will ask a lot of questions to understand what is most suitable for you, based on your resources and your objectives, but they are friendly and competent in my experience.
    In general though, if you are not concerned about preserving 100% of the value of the house for inheritance purposes then equity release may be the better option, especially if you do not have enough guaranteed income to allow you to cover a loan that requires repayment.
    On the other-hand if you could manage to cover the interest charges and you do want to preserve more of the value of the house for inheritance then a Retirement Interest Only mortgage could work for you, or if not 100% sure on wanting to repay the interest then an equity release product which allows you to make repayments but does not require them if you feel you no longer wish to make the repayments.


  • Miss_Trouble
    Miss_Trouble Posts: 7 Forumite
    Part of the Furniture First Post Combo Breaker
    Very useful info.
    Thankyou!x
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    With no mortgage left to pay you can at least boost your savings. £60k sounds a lot just to modernise. Have you had the project properly costed. 
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