Unencumbered

RufusRose

Does anyone know of any scheme or product for people with an unencumbered property to release the money during their life time and then, on passing away, the property becomes owned by the lender? 

elsien

You mean equity release? 

Keep_pedalling

Sounds like you are looking for a home reversion plan, but you are not going to get anywhere near the full value of your home if you go down that route. 

https://www.unbiased.co.uk/discover/pensions-retirement/planning-for-retirement/home-reversion

RufusRose

elsien said:

You mean equity release? 

Yes, but instead of monthly payments, the lender owns the property when we pass away. 

RufusRose

Keep_pedalling said:

Sounds like you are looking for a home reversion plan, but you are not going to get anywhere near the full value of your home if you go down that route. You 

This is really helpful - thank you.  The home reversion plan is closer to what I am looking for, although I was hoping there would be something more like 100% ownership. Ie: we get 90-100% and they get 90-100% when we die. 

MattMattMattUK

RufusRose said:

Keep_pedalling said:

Sounds like you are looking for a home reversion plan, but you are not going to get anywhere near the full value of your home if you go down that route. You 

This is really helpful - thank you.  The home reversion plan is closer to what I am looking for, although I was hoping there would be something more like 100% ownership. Ie: we get 90-100% and they get 90-100% when we die. 

You would be lucky to get half of the property value now and they would likely get 100% when you die.

ACG

RufusRose said:

Keep_pedalling said:

Sounds like you are looking for a home reversion plan, but you are not going to get anywhere near the full value of your home if you go down that route. You 

This is really helpful - thank you.  The home reversion plan is closer to what I am looking for, although I was hoping there would be something more like 100% ownership. Ie: we get 90-100% and they get 90-100% when we die. 

The problem is, if they gave you 90% today and you died tomorrow, after costs etc they would make no money. 
If they gave you 90% now and died in 2 years time, chances are house prices will not go up much in that time. So after giving you tens of thousands of pounds if not hundreds of thousands they have given you basically an interest free loan. 

The loan will very likely go up faster than the property value anyway so to get anywhere near 90% is not possible. 

MWT

RufusRose said:

Does anyone know of any scheme or product for people with an unencumbered property to release the money during their life time and then, on passing away, the property becomes owned by the lender? 

How old are you (both?) now?

Most of these schemes have a minimum age limit and the percentage you can get increases the older you are.

Also keep in mind that not all property is suitable for these schemes as the lenders are very sensitive about the ease of sale when the time comes.

... but as already mentioned you are never going to be able to release anything close to 90% of the current value, 20% - 60% depending upon age is more likely. 

Also, with equity release there does not have to be any monthly repayments, you can choose to just have the interest roll-up. 

Hoenir

RufusRose said:

although I was hoping there would be something more like 100% ownership. Ie: we get 90-100% and they get 90-100% when we die. 

Who services the debt, i.e. pays the interest? You could simply let the property go to rack and ruin. 

DullGreyGuy

RufusRose said:

Does anyone know of any scheme or product for people with an unencumbered property to release the money during their life time and then, on passing away, the property becomes owned by the lender? 

Life time mortgage/ equity release. The property doesnt automatically become the banks, that depends on interest rate, how long you've had the loan etc. Just double check its capped at the property value, most are these days but they weren't historically so they could exceed the property value.

Hoenir said:

RufusRose said:

although I was hoping there would be something more like 100% ownership. Ie: we get 90-100% and they get 90-100% when we die. 

Who services the debt, i.e. pays the interest? You could simply let the property go to rack and ruin. 

The interest is just added to the debt. Depending on your age there will be a cap of what percentage of the property value they are willing to lend, if you are 55% it could be be under 1/3 the value, most cap out at 60%, so there is a decent amount of headroom for the debt to increase and the bank still be fully compensated on your death or going into care.