Equity Release

[jennyjoan]

Do any of you think it is good! Particularly if you own your house outright.  Erm what is it good for.  Thanks for any answers.

[barry1010]

What do you want the money for?  What had you planned to do with your house when you die?

[jennyjoan]

well I was going to leave it to nieces and nephews or if I was going to a home - I guess it would have to be sold for the home

[barry1010]

But what do you want a lump of money for?

[jennyjoan]

bits and bobs Barry - erm implants (teeth) - hope a good way off.  Maybe adding a few thousand to another car cos I'm not happy with this one.  Well not happy with the handbrake.  

[barry1010]

Speak to an independent financial adviser, make sure you are fully aware of what's involved and alternative options

[jennyjoan]

thanks Barry

[barry1010]

On a personal level I would consider it as a last resort if I needed to spend a lot of money on the house for adaptions so that we could continue to live in it, or for round the clock care if we needed it, or if one of the kids was in dreadful trouble.

I wouldn't do it for a jolly shopping spree. 

Hope you are feeling much better than you was, JJ, and that you're more mobile and independent 

[hellywelly4]

I did it about 20 years ago and it cost an arm and a leg when I came to pay it off. The interest rate was horrendous, so I wouldn't recommend it. 

[Cloverjo]

I've read some bad things about these equity release people.

If you have a big enough house maybe sell it and buy a smaller place in the neighbourhood, leaving you cash to do what you want with, and a property for your future care home, nieces and nephews. I know someone who is doing this now.
Take proper advice first.

[barry1010]

I should have qualified my last answer.

I would only consider it if we were both in our very old age

[newmodarmy]

If you currently receive pension credit, the entitlement will end if you exceed the savings threshold owing to the equity release funds. 

 

[Zacs-Master]

Interest rates at the moment are high making equity release a non too sensible option. The last thing you should use it for is to pass on money to relatives for all sorts of reasons (tax being a main one).

[Hymie]

I’ve always thought that the interest rate charged by these equity release companies to be on the high side, given that it is not possible to default on the loan.

[Hopkirk]

What's wrong with the handbrake?

[ToraToraTora]

unless you absolutely must have the dosh, don't!

[ToraToraTora]

it's essentially an annuity. They give you some dosh and hope you die before they lose money.

[Old_Geezer]

I'm sure many will find it useful in their particular circumstances, but unless desperate it always seemed a bad deal to me. You stuggle for decades buying your place, then opt to exchange it for a bit of cash, and live in what effectively is now someone else's place, until you die and can't leave it to the individual(s) of your choice. Blow that for a lark.

[Zacs-Master]

That's not correct, OG. The property still remains yours, your benefactor/s simply have to pay off the loan amount + interest (which can be considerable) once probate is granted and /or the property is sold. 

[Old_Geezer]

It is correct in practice because the amount owed at death will leave next to nothing left to leave to anyone.

[Peter Pedant]

it's essentially an annuity.  - it is nothing at all to do with an annuity - go and sit on the innumerate step you naught boy!

These are known to be a terrible deal - and the sum repaid is MUCH more than expected. There is no one in the category of " phew that low! I thought it wd be higher"

There ARE deals where you get the lump sum and you pay the interest each month - then you know what the repayment is at your death ( the lump sum)

Otherwise keep well away from