Discounts on properties for over 60’s

peterhjohnson

maisie_cat said:

The over 60s scheme is a lease scheme, a bit like renting for life with the rental up front.
The elderly "homeowners" do not actually own the home, the investors do. 
There are not mortgage products available and the investors business case is predicated on the shorter expected lifespan of the tenants.

It may be better for the over 55s to use Equity Release or "Lifetime Mortgage". ER is commonly used to release cash from a property you already own but  can be used when moving house to get a more expensive house than would otherwise be possible. See for example https://www.moneyrelease.co.uk/Equity-Release-To-Purchase-Property/ 

theartfullodger

Keep_pedalling said:

..

Where is the fraud in ER? Someone gets a nice lump of cash to be able to have a better quality of life in their later years. Might not be the best deal for the beneficiaries of their estate ( if they have anyone to leave it too) but there is really no down side for the owner. 

.. It's how it's sold & talked about & advertised & described to those signing up to it.  A relative signed up imPRUDENTly to an equity release deal.  Seemed to regard it as some sort of magic wand / fairy dust that produced money with no downsides.  When I gently pointed out he'd sign up for a mortgage (well, set of mortgages..), and expensive ones at that, he got angry & told me he had no mortgages 9he did..).  Sat in a room with him when he 'phoned this bunch of cowboys wanting an extension, all very easy, money credited fast , (then effectively p*ss*d up the wall).  The mortgages, secured against the property, were at 6-7% pa.  

My advice to anyone in such circumstances wanting £££ would be to get loans / deals elsewhere: Cheaper, more honourable.

The only good news was there were no offspring who hopes would be dashed.  But the charity donations he fondly hoped would happen will be way, way, way lower in value that he fondly believed. 

GDB2222

theartfullodger said:

Keep_pedalling said:

..

Where is the fraud in ER? Someone gets a nice lump of cash to be able to have a better quality of life in their later years. Might not be the best deal for the beneficiaries of their estate ( if they have anyone to leave it too) but there is really no down side for the owner. 

.. It's how it's sold & talked about & advertised & described to those signing up to it.  A relative signed up imPRUDENTly to an equity release deal.  Seemed to regard it as some sort of magic wand / fairy dust that produced money with no downsides.  When I gently pointed out he'd sign up for a mortgage (well, set of mortgages..), and expensive ones at that, he got angry & told me he had no mortgages 9he did..).  Sat in a room with him when he 'phoned this bunch of cowboys wanting an extension, all very easy, money credited fast , (then effectively p*ss*d up the wall).  The mortgages, secured against the property, were at 6-7% pa.  

My advice to anyone in such circumstances wanting £££ would be to get loans / deals elsewhere: Cheaper, more honourable.

The only good news was there were no offspring who hopes would be dashed.  But the charity donations he fondly hoped would happen will be way, way, way lower in value that he fondly believed. 

When I last looked at lifetime lease schemes, professionally, the effective interest rate was 4-5%.