best equity release

phoneguru1

hi . iam looking for the best equity release deal , i owe £25.000 to be paid end of this year house is worth £470,000,, i ve had 1 quote of a company who say thet look for best deal going , iam looking to release £55,000. for home improvements iam retired with good income. the deal i was sent starts off at 6% and goues up 1% every year on top of the startin point ie 6% so 7% 8% etc as the years pass . is ther not one that is a tracker ?. iam looking for the best deal poss , there fees to do tis are £2,200 solicitors etc etc . has anybody out there thats had a better deal please and with no problems many thanks

phoneguru1

hi has anyone had any dealings on equity release , companys .problems what to watch out for etc , cheers in advance

MWT

Many posts on this group already with answers that would help so worth a search.

In general, make sure you understand all the costs involved as there can be a considerable range of charges for the advice which is required for these products. Anywhere from free to several thousand pounds…

Make sure your property is suitable as the lenders can be very picky about things like commercial adjacencies, pylons, non-traditional construction methods, general state of repair, and also internal clutter.

Make sure you understand what your options will be for early repayment (if that is a possibility) and understand what obligations you have to make repayments as that can vary from no repayments at all to paying off the interest each month or even a higher figure if you wish.

If you have others living with you not on the mortgage, they will be required to sign an occupancy waiver, and similarly if you have children or others who have expectations of inheritance you would be well advised to tell them what you are doing to avoid surprises later.

Other random thoughts… the amount you can borrow will depend on the age of the youngest life and you cannot have any other loan secured against the property so any existing mortgage would have to be paid off at the same time.

Do take care if you have plans to try and avoid care fees by using a trust as this is generally incompatible with equity release and can get in the way of a surviving partner using this type of finance.

Best to start looking around and ask more questions as you need…

Keep_pedalling

Who was this company? Are you planning to pay off the loan or keep it until you die?

weleasewoger

We have recently agreed to an equity release deal and the best advise I can offer is first to instruct a qualified financial advisor- they can be found on The Equity Release Council website.Yes you'll have to pay a fee which is usually taken from the first drawdown but it will be well worth it.
That offer you have received of increasing by one percent each year is appallingly expensive and no advisor would recommend such a deal.

MWT

https://forums.moneysavingexpert.com/discussion/6661529/best-equity-release

Is there anything unusual about the property, its location, commercial adjacencies, power lines, construction etc.?

Reason I ask is that you should be able to find a deal offering a fixed interest rate, not one that escalates.

You really need to be talking to an advisor who specialises in retirement products and you may even be able to take a normal mortgage product for that sort of amount if you have sufficient guaranteed income in retirement…

phoneguru1

no just a brick built detatched house normal roof in its own grounds in a affluent area buily circa 1966

phoneguru1

hi no pylons residential area considerd affluent . not near any commercial properties etc etc , i want to pay the interest off fully monthly . no one living with me etc .no children . no wife . still working good income iam over 65 thank you

MWT

No red flags so far then…

You will need to take advice, but on the question of paying off the interest monthly, depending on the product you choose, you will have the choice to either commit to having to pay the interest, or just retain the option to pay the interest.

Obviously the optional route has more flexibility…

When you talk to the advisor they will ask about your motivations and aims, so be prepared to explain what you want to do with the money and why you want to pay the interest each month.

Also consider if there are better options depending upon how much you want to take out and how much the property is currently worth etc.

MWT

https://forums.moneysavingexpert.com/discussion/comment/81941996#Comment_81941996

Then it sounds like you need a better advisor as you should have no problems locating a deal with a fixed interest rate that does not escalate.

You will probably not find a tracker, but if you pay attention to the early repayment charges you should be able to get something where the ERC drops year by year so in time if there are cheaper deals out there you could pay off the first one and move to a new deal.