equitly release or something similiar

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i have put this in another section too as i wasnt sure which one to put it in so done both, thanks for reading guys and girls.x


hi all my nan has owned her house for nany yrs she has no mortgage on it but has no money either and she keeps lookinginto these places that buy your house and let you live in it or equity release so she has some omoney to do things up around the house,
now as you can probably tell seeing as im asking for advice i really dont understand any of this so could someone please help and explain it to me, thankyou very much.x

dudleyboy

So the plan is to sell the roof over your nan's head, then pay rent to the buyer (who could very well kick her out after 6-12 months because that's what these people do), so that she can afford to do-up THEIR property?

It doesn't make sense, does it. Seriously, these equity release schemes are an absolute scam. Please don't consider it as an option. It is very likely that your nan will be made homeless if she does!

http://www.itv.com/News/tonight/episodes/Ilostmyhouse/default.html

seven-day-weekend

Equity release is different to sell-and-rent-back.

I agree with the previous poster that sell-and-ren-back should be avoided at all costs, because all your Nan will get is 70% of the price of her house plus ann Assured Shorthold tenancy, which meands that after six months she can be chucked out with two month's notice and without any reason.

I would ask about Equity Release on the Retirement Board, and also on Silver Savers, there are people on there who know all about this and one poster (Margaretclare) who has done equity release.

Hope you get some good advice.

SquatNow

Why doesn't she just downsize to a more appropriate property?

Retirement bungalow maybe?

Austin_Allegro

Can I make a plea for the term 'Equity release' to not be used?

The correct term is 'mortgage' or, more usually, 'second mortgage'. 'Equity release' is sophistry to give the impression you are somehow 'releasing' money 'trapped' in your property, which is nonsense. You are taking out a loan secured on your property which must be repaid.

A lot of people have got into financial difficulties because of this, eg the brummie Bouncer family in ITVs recent 'Reposession' programme.

IMO the only time it should be done is to put right things with the house which seriously devalue it - eg, a leaking roof, rotten windows etc, which cannot be paid for any other way. To use it for cosmetic improvements in the hope of 'adding value' to your home (in a falling market) is best avoided.

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dudleyboy wrote: »

So the plan is to sell the roof over your nan's head, then pay rent to the buyer (who could very well kick her out after 6-12 months because that's what these people do), so that she can afford to do-up THEIR property?

It doesn't make sense, does it. Seriously, these equity release schemes are an absolute scam. Please don't consider it as an option. It is very likely that your nan will be made homeless if she does!

http://www.itv.com/News/tonight/episodes/Ilostmyhouse/default.html

hi all thanks for advice, dudleyboy i wasnt planning on selling the roof from overhead, she asked me about it and as i didnt know anything about these schemes i told her i would enquire which im doing but thanks for advice anyway.

my nan lives in a 3 bed semi detached which i must admit is getting to big for her to cope with, i have suggested to her that i would build her her own granny annex so to speak at the end of our garden so she would have her own little place to do as she pleases with yet all of my family here if she wants company and also the money from sale of house to do as she pleases with but she really doesnt want to leave her home as she has been there so many yrs and had her children there etc,

so ok i get the buy back schemes are not to be touched with a barge pole so will look into the equity release
, nan doesnt have any means tested benefits and as for leaving her inheritance behind we all agree that if she wants the money to spend on what she likes ie hose repairs double glazing , holidyas, days out etc she should go ahead with it and enjoy i just am trying to find a safe way for her to do that. thanks again guys

EdInvestor

Austin_Allegro wrote: »

Can I make a plea for the term 'Equity release' to not be used?

The correct term is 'mortgage' or, more usually, 'second mortgage'. 'Equity release' is sophistry to give the impression you are somehow 'releasing' money 'trapped' in your property, which is nonsense. You are taking out a loan secured on your property which must be repaid.

But not until after you die or move into long term care and the house is sold. That´s the point of equity release mortgages - you can release capital without repaying the money and you can´t end up owing more than the house is worth.

Not sophistry at all but a very useful new product for older people who are asset rich and income poor.

PasturesNew

I'd sell up and downsize into one of those retirement complexes. Where you buy your own flat and pay about £200/month for all the buildings maintenance to be done and there to be an on site warden and a panic button thing in the flat. Additionally they tend to have a communal lounge (you leave your flat, lock your door, go to the communal area, so it's not like an old folks' home) and often also have a flat available for when visitors want to stay with you.

You get a nice, warm, maintenance free home of the right size. You are surrounded by people in the same position as yourself, so no worries about neighbours from hell or being bullied in your own home like in the outside world proper. So, should a drunk be outside at 3am you won't feel alone/scared. On top of that there's the whole social side of the communal lounge, yet it's your property that you buy and is part of your estate.

SquatNow

EdInvestor wrote: »

But not until after you die or move into long term care and the house is sold. That´s the point of equity release mortgages - you can release capital without repaying the money and you can´t end up owing more than the house is worth.

Not sophistry at all but a very useful new product for older people who are asset rich and income poor.

Correct he was confusing Equity Release with Mortgage Equity Withdrawal.

Mortgage Equity Withdrawal is a way to get stupid people to take out large loans secured on their homes to spend on BMW, plasma TVs and other tat they think they need but don't.

Equity Release was created as a way for banks to take advantage of senile old people and old people who trust banks as they were "respectable" back in their days, allowing banks to profit from HPI without ever having to actually BUY any property and take any real risks.