Equity Release

[brainiac]

Has anybody on AB gone through with equity release? There are plenty of websites about it, and I know there are two main ways to do it, but I've read many negative articles in many newspapers that have put me off, particularly the main company in the market, Key.

I'm interested in the version where the interest that accrues is not paid until the property is sold, and any personal experience of this would be welcome.

[Maydup]

No personal experience, but I would try to find some professional advice if I were you. Here's a few tips to look at while others respond.

https://www.moneysavingexpert.com/mortgages/equity-release/

[Peter Pedant]

yeah lots and lots of threads about this
and what a bad buy it is

at 7% interest - your debt doubles every seven years
(mI think)
yes it is that bad a deal
dont do it

[Peter Pedant]

or take advice from bozos and walk ins like me
dont do it!

[DTCwordfan]

and wait for the front end fees and expenses....never mind the interest.

[fiction-factory]

By all means get a few quotes. if you are not bothered about passing on a property or large sum to anyone then I'd say it is definitely worth considering. however they will require you to maintain the property in a way that they find satisfactory. if you wa t to pass one large amount however you may find they offer you well below market value, charge 7% compound interest ( which means double in roughly 10 years) plus fees. it can also cause big problems with the estate especially if you later need a care home where fees may be needed. the cash sum can also reduce pension credit.

[Peter Pedant]

damn 7% doubles in ten years
I knew someone wd spot the mistake

Hi FF !

[fiction-factory]

Morning PP. Another factor is that awkward question of life expectancy. if your age, health, lifestyle, family history suggest you've got 2 years left you can enjoy a big lump sum. if you expect to live nearer 20 years then you need to spend it more carefully, keeping plenty back

[Peter Pedant]

er I am a two year man
b;ood cancer
and still wouldnt dream of it

[brainiac]

Thanks for your replies. Yes, the interest and fees do seem alarming - in one case about £1,500 as soon as it goes through, even though you wouldn't have to pay anything until the property is sold (in the version I'm interested in). Didn't know about 'maintaining the property in a way they find satisfactory' - do they come round and inspect?

Would still like to hear from anyone who has actually done it.

[fiction-factory]

Yes, one relative did it. They got a new car and a holiday from the proceeds but little else. One died. Then wife ended up in care home and died. Three years later the rest of the estate still hasn't been distributed as council/care home are insisting on knowing what happened to the cash released 10 years earlier (was it syphoned off to family to avoid fees?) and demanding payment of circa £30000 care home fees and solicitor has already racked up fees of a few thousand pounds

[brainiac]

Thanks, ff. Still trying to find something positive anywhere about this....

[fiction-factory]

If you would find the money really useful and need it more than your dependants then I would go for it and let your executors sort any issues out when you've gone.

[Denton]

I've done it,massive mistake,managed to find the money to pay it off,Borrowed £11,000, before I knew it, after a few years it had rocketed to £47,000. Read what Peter says.

[fiction-factory]

One correction to avoid any ambiguity:

If you would find the money really useful and need it more than your dependants DO then I would go for it and let your executors sort any issues out when you've gone

[Denton]

9 years.

[brainiac]

One of the reasons I've looking into it is that I have no dependants, but posts like Denton's are alarming.

[fiction-factory]

Denton's must have been a different type. You would never owe anything (just pay up front fees and some legal fees) and maybe a small annual admin charge since the interest only has to be paid from your estate.
I'd go for it if you need the money and are prepared to be offered much less than your house is worth.

[Denton]

Mine was with Aviva,had a terrible time trying to sell my house.

[Denton]

Selling my house was the reason I paid it off.

[Denton]

Maybe I worded it wrong,but the £47,000 was how much it had went to in 9 years,quoted by Aviva,hence I paid it off.