ChatterBank2 mins ago
Equity Release
6 Answers
I am considering getting rid of my house in an equity release scheme. Would I get the full market value, and would I be able to rent it back? I am 56 and my wife is 55, and we are struggling to make ends meet. I have sons that I would like to cater for also, so if I rented it back, would they be able to continue renting when we are no longer around?
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You are very young to be considering an equity release - only just eligible for some, and too young for most where the minimum age is 60 or even 65.
If you sell your home to a reversion company, you will only get 30 - 60% of the market value. The older you are the more you get - as the company doesn't have to wait so long for you to die.
Another way is a lifetime mortgage - you get a lump sum but make monthly repayments as interest. The company gets the capital when you die. As you are so young, you could be making these payments for 40 years.
In a nutshell to your questions :
You will not get full market value
When you and your wife die the house must be sold to repay the companies. Your sons could not rent it.
In depth information here:
http://www.unbiased.co.uk/find-an-ifa/guides/m ortgages/equity-release-unlocking-money-from-y our-home/
If you sell your home to a reversion company, you will only get 30 - 60% of the market value. The older you are the more you get - as the company doesn't have to wait so long for you to die.
Another way is a lifetime mortgage - you get a lump sum but make monthly repayments as interest. The company gets the capital when you die. As you are so young, you could be making these payments for 40 years.
In a nutshell to your questions :
You will not get full market value
When you and your wife die the house must be sold to repay the companies. Your sons could not rent it.
In depth information here:
http://www.unbiased.co.uk/find-an-ifa/guides/m ortgages/equity-release-unlocking-money-from-y our-home/
We knew someone who was house rich..cash poor. They solved the problem by trading down. This does not always mean moving to an inferior house but maybe to another location where property is cheaper. As a last resort you could even move abroad to France where property is priced below half that of the UK.
I was talking to my f=dad at trye wekend and he watched a program on the TV where the owner of the property had borrowed less than �100K through ER and ended up with a bill of over �600K (don't know how). Make sure you read or get a solicitor to read the small print. I'd downsize or remortgage if you need the cash.
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