Equity release

steve2361

Hi 
Due to circumstances my wife and I will not be able to pay off our mortgage by  November 24. I am 62 and my wife 64. 

We are thinking of getting equity release to pay it off. 

Is this a good idea. 

Any advice would be greatly appreciated

Thanks Steve 

Keep_pedalling

It could be but you don’t give enough information to say more than that. How much is the outstanding loan, and what is the value of the house? Will you you be in a better position to pay off any loan in the near future, for example pension lump sums? Do you have children? Do you have enough equity in your home to downsize and clear the loan? 

Petriix

It's unlikely that equity release will give you the best value for money, especially if you intend to leave an estate for any children. There are plenty of lenders who will lend into retirement on a regular mortgage which is likely to be better value as long as you meet affordability.

steve2361

We owe £100,000 and house value is £280,000

Silvertabby

I think you may be pushing it to get that amount of equity release at your ages.  Probably not what you want to hear, but would downsizing be an option?

Nearlyold

Are you paying it down currently if so how much is it reducing by each month. Is Nov 24 the end of the mortgage term or just a target you'd set yourself.

MWT

steve2361 said:

Hi 
Due to circumstances my wife and I will not be able to pay off our mortgage by  November 24. I am 62 and my wife 64. 

We are thinking of getting equity release to pay it off. 

Is this a good idea. 

Any advice would be greatly appreciated

Equity release should always be the last option not the first, so to make it a 'good idea' you would have to have eliminated all other options like down-sizing, or getting another mortgage or any other method of reducing the remaining balance.

If you have already considered the other options and they are not suitable due to your lack of retirement income or ability to continue to work for a few more years then I would suggest talking to a suitable advisor like 'StepChange Financial Solutions' as they do not charge you a fee for their advice so you can explore your options and see if it is going to be possible to get £100k released from your property...

I do think it is going to be challenging to get that much, but you are going to need to talk to someone and get advice if you head down the equity release route so it may as well be free advice rather than having to pay as much as a few thousand for the advice phase when you are likely to be struggling to get close to that £100k target in the first place.

Your property has to be suitable as well, both in terms of its current state of repair and general tidiness inside. Location and nature of construction are also key considerations, so adjacencies to commercial premises can be a problem as could things like being an ex-Council house with a novel concrete construction method for example.

Do not put off starting that sort of conversation though as you need to know now what sort of amount you could release so you can plan to deal with any shortfall over the next year..

Do keep in mind that you cannot have any other type of mortgage alongside an Equity Release product, it is one or the other....

kingstreet

I take it we are describing interest roll-up as equity release?

OP - get advice from a qualified authorised advisor. Your options, all under the Lifetime Mortgage heading are;-

capital & interest remortgage
retirement interest-only remortgage
interest roll-up remortgage

The first will be repaid by a set date but will have the highest payments.

The second will see you paying the interest and having the capital repaid on sale of property or on death.

The third will have no contractual payments but will still allow you to make some payments voluntarily.

The first two options will be based on affordability using your retirement income (even if not yet retired) and for the capital & interest option there are lenders offering terms, for example, to age 90 or more.

steve2361

Thanks so much for the advice. I will consider all options before getting equity release 

MWT

steve2361 said:

Thanks so much for the advice. I will consider all options before getting equity release 

The process of getting the required advice for an Equity Release product will necessarily make sure you have considered other options and the various versions of equity release, it is sensibly not a product you can just decide to get and go out and sign up on a whim.

gwynlas

You can probably get a mortgage to the age of 80 if you have guaranteed retirement income to make repayments, It might not be what you want to hear but if you were renting you would be making payments all your life