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    • MSE Rosie
    • By MSE Rosie 26th Jun 18, 4:10 PM
    • 88Posts
    • 40Thanks
    MSE Rosie
    Equity Release guide discussion
    • #1
    • 26th Jun 18, 4:10 PM
    Equity Release guide discussion 26th Jun 18 at 4:10 PM

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Page 2
    • Mnd
    • By Mnd 17th Dec 18, 9:34 AM
    • 1,423 Posts
    • 2,214 Thanks
    Mnd
    I don't think you need to do anything, as I understand it nothing needs to be paid while there is 1 surviving parter left living in the home.
    The loan only needs to be paid out on the death or going into care of that second person.
    Sorry if my understanding is incorrect
    • Keep pedalling
    • By Keep pedalling 18th Dec 18, 10:42 AM
    • 7,103 Posts
    • 8,329 Thanks
    Keep pedalling
    im heartbroken I have just found out my parents had equity release on their house around 18 yrs ago borrowed 60K on checking a lastest statement now owe 118K dont know what to do? anyone got advice?
    Originally posted by bevjtaylor
    Your parents obviously needed the money, and they will not have to pay it back it will simple reduce the value of their estate. I hope you are not saying you are heartbroken simply because it reduces any inheritance you thought you were getting.

    Although it is usually an option of last choice, for many people who are property rich and cash poor ER gives them an option to live more comfortably. I have seen far too many people sitting on a fortune, but live in squalor because everything is tied up in their home. When they die their children sell up and live the life of Riley on the proceeds.
    • badmemory
    • By badmemory 18th Dec 18, 4:41 PM
    • 2,751 Posts
    • 4,383 Thanks
    badmemory
    Are you trying to say that they owe £118k & the house isn't worth that? I believe that was possible with some agreements. If you could have given them the money at the time (or even loaned it) then I can understand being heartbroken as to see those interest rates charged when you may well have only had to pay a third of that would be sickening.
    • Bfd
    • By Bfd 4th Jan 19, 4:28 PM
    • 1 Posts
    • 0 Thanks
    Bfd
    My mum took out an equity release and although there is a no negative equity clause, it looks like we will have no value to inherit on the house as the interest is so high and the debt escalating. She can't afford to repay any of it so we have to just wave goodbye to the family home when she passes which is such a shame. Is there any way to reduce the interest rate??
    • Keep pedalling
    • By Keep pedalling 5th Jan 19, 6:14 PM
    • 7,103 Posts
    • 8,329 Thanks
    Keep pedalling
    My mum took out an equity release and although there is a no negative equity clause, it looks like we will have no value to inherit on the house as the interest is so high and the debt escalating. She can't afford to repay any of it so we have to just wave goodbye to the family home when she passes which is such a shame. Is there any way to reduce the interest rate??
    Originally posted by Bfd
    The only way out of a lifetime mortgage is to pay it off, and the interest rate will be fixed, unless the total dept reaches the actual value of the property when it effectively becomes zero.
    • rosmic
    • By rosmic 4th Feb 19, 8:54 PM
    • 3 Posts
    • 0 Thanks
    rosmic
    Equity telease
    I live in a Park Home. If I sold it I wouldn't have enough money to buy anything more manageable or if I rent somewhere my money wouldn't last long. Is there anywhere at all that would give me equity on my park home please?
    • Keep pedalling
    • By Keep pedalling 4th Feb 19, 10:00 PM
    • 7,103 Posts
    • 8,329 Thanks
    Keep pedalling
    I live in a Park Home. If I sold it I wouldn't have enough money to buy anything more manageable or if I rent somewhere my money wouldn't last long. Is there anywhere at all that would give me equity on my park home please?
    Originally posted by rosmic
    I doubt it, park homes tend to depreciate in value, and ER companies prefer to lend against something that is likely to increase in value and not leave them with a shortfall if the borrower turns out to be long lived.
    • biglugs
    • By biglugs 5th Feb 19, 1:39 PM
    • 2,844 Posts
    • 908 Thanks
    biglugs
    What happens if, after some years from taking Equity Release, you need to move for any reason, eg down-sizing, disability issues, or just to be nearer relatives. Do the repayment terms come into play? Or can you transfer the plan to the new property somehow? Otherwise you could end up with insufficient equity to buy anywhere.......
    Originally posted by echos mum
    Some providers will let you port the loan over to the new property, provided it is of a type that they will lend on, and that the equity in the new property still meets their maximum amount. If it is in excess of that they will charge a part-redemption fee.

    If they won't accept the new property type they will charge the entire redemption fee.
    You don't get medals for sitting in the trenches.
    • biglugs
    • By biglugs 5th Feb 19, 1:47 PM
    • 2,844 Posts
    • 908 Thanks
    biglugs
    im heartbroken I have just found out my parents had equity release on their house around 18 yrs ago borrowed 60K on checking a lastest statement now owe 118K dont know what to do? anyone got advice?
    Originally posted by bevjtaylor
    In 18 years your parents debt has almost doubled. At the same time house prices have increased by roughly 175% (from Nationwide House Price Index).

    So if their house was worth £200k (say) when they took out this loan they still have equity of £432k. Not a bad deal IMO.
    You don't get medals for sitting in the trenches.
    • missile
    • By missile 5th Feb 19, 3:00 PM
    • 10,277 Posts
    • 5,298 Thanks
    missile
    Borrow £60,000 after 18 years the accumulated debt is £118,000. That would approximate to circa 3.8% interest. That is a very good deal, IMHO.
    "A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
    Ride hard or stay home
    • Browntoa
    • By Browntoa 5th Feb 19, 3:02 PM
    • 35,695 Posts
    • 41,863 Thanks
    Browntoa
    The downside to equity release/lifetime mortgage

    Unless you make interest or capital repayment the debt rolls up year on year
    I'm the Board Guide of the Referrers ,Telephones, Pensions , Shop Don't drop ,over 50's , Boost your income and Discount Code boards which means I volunteer to help get your forum questions answered and keep the forum runnning smoothly .However, please remember, board guides don't read every post. If you spot an inappropriate or illegal post please report it to forumteam@moneysavingexpert.com Any views are mine and not the official line of MoneySavingExpert.
    • TELLIT01
    • By TELLIT01 6th Feb 19, 11:19 AM
    • 7,202 Posts
    • 7,818 Thanks
    TELLIT01
    I've just read this topic for the first time. One person says that anybody who doesn't make repayments on the loan is a mug, but that surely depends on personal circumstances.
    We have a property currently worth close to £300k and no children. We have one niece and one nephew and they will be welcome to anything in our estate when we finally pop our clogs, but we certainly don't intend to leave ourselves financially stretched to achieve that end. I have no plans currently to go the equity release route, but may well do in a few years time although I will research all available options when the time comes. I am nobodies mug, I simply don't care how much equity is left in the property when we die.
    • thegreybeard
    • By thegreybeard 6th Feb 19, 1:02 PM
    • 13 Posts
    • 5 Thanks
    thegreybeard
    Buy-to-lets
    Is equity release available for buy-to-let flats?
    • Alotbsol
    • By Alotbsol 6th Feb 19, 1:40 PM
    • 1 Posts
    • 5 Thanks
    Alotbsol
    Equity Release - the good news
    We took out equity release 10 years ago so that we could help our sons get onto the housing ladder rather than pay high rents - we were simply bringing forward the legacies they would inherit eventually. That first deal was expensive (6.6%). so last year we paid it off and moved to Nationwide (via Age Solutions) at 3.5%, and there were no extras except £700 legal fees - Nationwide paid Age Solutions and the surveyor who valued our house. Now our house is increasing in value faster than the Equity release, and we are well pleased.
    • Buggins
    • By Buggins 6th Feb 19, 1:40 PM
    • 326 Posts
    • 243 Thanks
    Buggins
    My sentiments exactly and I have already taken out ER which has helped me achieve a standard of living. My attitude is that you work all your life to pay for your house and now I need to recoup some of the money to live in it. It is only a modest semi btw.
    • biglugs
    • By biglugs 6th Feb 19, 2:02 PM
    • 2,844 Posts
    • 908 Thanks
    biglugs
    Is equity release available for buy-to-let flats?
    Originally posted by thegreybeard
    There are some lenders who will consider rental properties for Equity Release, but this is a specialist area - particularly as the valuation of flats can be an issue. Your best bet is to speak with a qualified ER broker.
    You don't get medals for sitting in the trenches.
    • biglugs
    • By biglugs 6th Feb 19, 2:04 PM
    • 2,844 Posts
    • 908 Thanks
    biglugs
    My sentiments exactly and I have already taken out ER which has helped me achieve a standard of living. My attitude is that you work all your life to pay for your house and now I need to recoup some of the money to live in it. It is only a modest semi btw.
    Originally posted by Buggins
    Not only that, but most of the equity in people's houses these days isn't the capital that they paid off the mortgage - it's the accrued house price rises which have been tremendous in the past 10-15 years. For certain groups of people this is free cash, and it makes perfect sense to release some of it for certain things.
    You don't get medals for sitting in the trenches.
    • ikennedy
    • By ikennedy 6th Feb 19, 2:50 PM
    • 1 Posts
    • 0 Thanks
    ikennedy
    Inheriting loan
    Hi, I have just found out my father took out a lifetime mortgage of 90K, against a property value of 190K 5 years ago. He hasn't been making any payments into this, and currently owes 109K. The property has since increased in value to 210K. He is not in poor health and so we do not expect to inherit the property any time soon. Given the already significant increase in loan amount, I am concerned that he will end up in a position where he owes more than the property is worth. Given that he has no intentions to pay money into this loan, will we potentially end up owing the bank more money than the property is worth? I am concerned we will ultimately end up inheriting his debt.
    • missile
    • By missile 6th Feb 19, 3:40 PM
    • 10,277 Posts
    • 5,298 Thanks
    missile
    Ö Given that he has no intentions to pay money into this loan, will we potentially end up owing the bank more money than the property is worth? I am concerned we will ultimately end up inheriting his debt.
    Originally posted by ikennedy
    Even if the he owes more than the value of the property, you cannot inherit his debt when he dies.

    If you are in any doubt speak with the equity release provider.
    "A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
    Ride hard or stay home
    • Keep pedalling
    • By Keep pedalling 6th Feb 19, 4:45 PM
    • 7,103 Posts
    • 8,329 Thanks
    Keep pedalling
    Hi, I have just found out my father took out a lifetime mortgage of 90K, against a property value of 190K 5 years ago. He hasn't been making any payments into this, and currently owes 109K. The property has since increased in value to 210K. He is not in poor health and so we do not expect to inherit the property any time soon. Given the already significant increase in loan amount, I am concerned that he will end up in a position where he owes more than the property is worth. Given that he has no intentions to pay money into this loan, will we potentially end up owing the bank more money than the property is worth? I am concerned we will ultimately end up inheriting his debt.
    Originally posted by ikennedy
    In 5 years the remaining equity has remained static so it is unlikely the house will not be able to pay off the loan, and even if it did the most the ER are going to get back is 100% of the house value even if the estate contains other assets.

    ER companies are pretty good at how much they will lend against a house to make sure they get their loan and interest back.
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