Has anyone got any experience of this,seems pointless to me sitting in a house thats worth a lot more than the purchase price when we bought it years ago when we could be spending the proceeds,who knows I could snuff it tomorrow.
Did it years ago for extension, would have paid me mortgage off by now though. Extensions nice and added value but I would rather have spent it on a flash car and ■■■■.
Think very carefully about it though, last thing you want is negative equity and to be saddled with a more expensive mortgage.
I’m no financial advisor and don’t know your financial position but have noticed a potential for interest rates to rise.
one of our family borrowed £60,000 about 15 years ago, just passed and the repay was £160,000 so not a lot to inherit from a £2000,000 house, luckily it was nothing to do with me but the divisions it caused between the family will stay for years, although why would you expect to be left anything, my parents had nothing to leave but if they had I would sooner they enjoyed it,
My understanding is the fees can be really high. I think the example was they would only pay £50k for 50% share of a £200k property.
Depends on your circumstances and if you want to leave an inheritance etc. Take some independent advice
Think i might look a little deeper after all they don’t do it for charitable purposes do they,thanks for the input.
hotel magnum:
one of our family borrowed £60,000 about 15 years ago, just passed and the repay was £160,000 so not a lot to inherit from a £2000,000 house, luckily it was nothing to do with me but the divisions it caused between the family will stay for years, although why would you expect to be left anything, my parents had nothing to leave but if they had I would sooner they enjoyed it,
Many see their only hope of owning a home as getting a good inheritance. Not saying thats right. I don’t expect to inherit anything. I hope they enjoy it however its more likely that they will need the money to support them in retirement for income or care
Only one real winner , it won’t be you .
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Think short term gain/ long term loss unless it’s for a really good home improvement that will add lots of value.
Loft conversion +kitchen and downstairs loo c/w glory hole added a nice chunk but my home is always going to be limited by area ceiling and the small matter of what folks are willing to pay.
Despite being told not to do it, a friend recently borrowed £30K on his £120K home, with the interest etc he figured that in 22yrs he’ll repay around £95K and still be able to live in the home till he dies. My guess is that the repayment is closer to the total value of the property. So he’s effectively sold his £120K home for £30K. Where as he could have sold his home for £120K, downsized & spend £30K, and still have change.
Peirre…thats good advice…i recently looked into it and thats fine if you dont want to leave anything when you go…but you also have to bear in mind, that the property could cost more than the amount outstanding
( their loss ) and this may have to be borne from the estate…all looks good on paper…but in reality its not…as once you take out the loan ( equity ) thats when the interest begins, and doesnt stop until 1 or 2 owners have popped their clogs and the company ask for their money…or just take the house. But i suppose if you have no one to leave it to, and you cant take it with you when you go…then spend it now on the nicer things…they cant kick you out…so its still yours to live in, but with a new landlord…my question is: Do you have to pay a fee every month, or are you living rent free?
bobbya:
Has anyone got any experience of this,seems pointless to me sitting in a house thats worth a lot more than the purchase price when we bought it years ago when we could be spending the proceeds,who knows I could snuff it tomorrow.
Most expensive way to borrow. You’ll wish you didn’t do it down the line when you come to sell the house. They buy a percentage of the house so you borrow £10k and if the house sells for double what it was when it was valued for the loan they get back £20k. That would be £20k less you have to put in your pocket or £20k more you have to find for the new place.
And equity release just to blow it on rubbish, well you’ll regret that when you retire skint.
Equity release is something that you do to avoid bankruptcy, not just because you fancy a holiday.
Personally I would look at trading down if you don’t need such a large house, that way you’re in control of your money and future. It also means you’re running costs are less giving you more disposable income or need to work as many hours giving time to live.
Anything that gives a third party control of you’re assets when you die has to be a bad idea depending on you’re age you could re mortgage there is some cracking deals available just now (I just fixed mine at 2.14 % for 5 years with no fees)
Or another option is to downsize, don’t do anything without consulting with an independent adviser.
We did it a couple of years ago, a Martin Lewis article prompted us into finally deciding. The mortgage had been paid off and we have no dependants to leave anything to so did it to have some reasonable quality of life in our old age as none of us know how long we have and Mrs Windrush has a progressive illness that will only worsen and my health isn’t brilliant nowadays either. Downsizing wasn’t an option, we live in a small house anyway. It doesn’t suit everyone of course, it depends on your individual circumstances really. There are various hidden costs involved though, an independent financial advisor doesn’t work for £5 an hour and neither do solicitors, their fees are taken from the final amount.
Pete.
windrush:
We did it a couple of years ago, a Martin Lewis article prompted us into finally deciding. The mortgage had been paid off and we have no dependants to leave anything to so did it to have some reasonable quality of life in our old age as none of us know how long we have and Mrs Windrush has a progressive illness that will only worsen and my health isn’t brilliant nowadays either. Downsizing wasn’t an option, we live in a small house anyway. It doesn’t suit everyone of course, it depends on your individual circumstances really. There are various hidden costs involved though, an independent financial advisor doesn’t work for £5 an hour and neither do solicitors, their fees are taken from the final amount.Pete.
Thank you for that sounds pretty much what I was after,good luck to you and the missus.
Before driving i worked as a financial advisor. Got out as the morality of making money as a parasite of other peoples savings was getting to me. Never ever trust a financial advisor, their only source of income is to make money from you. If you feel like you really need advice get an independent advisor who charges by the hour, do not pay commisions.
Equity release/Life time morgage is a really dodgy area. All the cowboys who couldn’t pass the financial advisor exams when the regulations were tightened up moved into morgages, unitl the crisis then they moved onto equity release. Regulation of equity release is way behind and will be the next crisis when the majority that have been sucked in years ago start to pass away. The charges are huge, its basically a mortgage in reverse. The interest rate might sound reasonable (especially with them being low at the moment) but it is a % on a big sum. The longer you live the bigger the charge.
There are other options. Downsize. Sell your house and rent. Rent is dead money but will be a lot less than the interest on the loan secured on your asset. Equity release plays on the attachment people have to their homes, if you can change mindset and see it as an asset it opens up many options. As you get older why not look to old peoples housing, sell your asset and invest the cash using the returns to pay the rent. Controlling your own destiny opens up a world of options.
calsdad:
Before driving i worked as a financial advisor. Got out as the morality of making money as a parasite of other peoples savings was getting to me. Never ever trust a financial advisor, their only source of income is to make money from you. If you feel like you really need advice get an independent advisor who charges by the hour, do not pay commisions.Equity release/Life time morgage is a really dodgy area. All the cowboys who couldn’t pass the financial advisor exams when the regulations were tightened up moved into morgages, unitl the crisis then they moved onto equity release. Regulation of equity release is way behind and will be the next crisis when the majority that have been sucked in years ago start to pass away. The charges are huge, its basically a mortgage in reverse. The interest rate might sound reasonable (especially with them being low at the moment) but it is a % on a big sum. The longer you live the bigger the charge.
There are other options. Downsize. Sell your house and rent. Rent is dead money but will be a lot less than the interest on the loan secured on your asset. Equity release plays on the attachment people have to their homes, if you can change mindset and see it as an asset it opens up many options. As you get older why not look to old peoples housing, sell your asset and invest the cash using the returns to pay the rent. Controlling your own destiny opens up a world of options.
A financial advisor( ex ) with morals and giving good advice, that’s two firsts in my book 
We sold house ten years ago after wife retired,gave kids a lump,live in various caravans, statics and tourers in Europe mostly now, when we can’t do that the plan is to return full time to UK and rent.
Equity release might work for some but the big winner will always be the lender.
I wouldn’t touch equity release with a 30’ barge pole,
Far better less expensive options out there!!!
Sell up and invest money wisely and rent.
Head to the Med and buy a static on a nice site for £10/15k and live “life O’Reilly” in sunshine.
Some fantastic sites about Southern France and Spanish Costa’s!!!
You may be surprised what you can buy a 3bed villa in Cyprus/Turkey for!!!
“Sunny Beach” in Bulgaria £20k buys 2bed apartment with shared pool etc!!!
Or remortgage 30/40/50% of house value and fix rate for 5/10yrs!!!
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I actually suggested to my friend that they sell the house and rent, then once the monies gone they would probably end up moving into social housing with the rent paid for by the state