Re: Equity Release

People are ill advised if they go in for equity release, as it could come back to bite them big time.

Re: Equity Release

Equity release?

Where would you like me to start? I looked into it last year.
Most charge no administration fees, though solicitor fees, which you are liable for, could run into a few grand.
Don't pick an ordinary solicitor. You need a specialist conversant with Equity in's and out's who they will need to approve as suitable.

On balance, I would say ... don't bother or be very careful unless you are really desperate for money whilst wanting to stay in your current home till you die.
And be prepared, they pick your house to shreds regarding valuation... and the general guideline is 30% of value for a 60 year old person and no higher than 40% anyway... unless you can prove you are on your last legs.
One or two clauses in the deal , like they have the right to periodically inspect your property (their investment) and have the power to authorise (and charge you) for any maintenance they want doing left me seriously wondering whether you'd end up feeling like a tenant in your own home.
I didn't even get my head around the procedure over if either one or both of you go into care.

On balance, it's better to downsize.

Re: Equity Release

Morticia are you sure the last but one paragraph does not relate to a home inversion plan which is different and you no longer own you home and not a good idea.
Average conveyacing fees for equity release conveyance are between £600 -£900 plus VAT and survey fees are approx £400.
LTV is usually no more than 50% but this can differ and never borrow more than you can afford to pay back in interest. You still own your home and if the price goes up as long as you have paid off the interest then you still owe the same amount of money.
You may not be able to leave all your house to offspring but if you had to go into residential care they would not get it anyway as the council would take it to pay for your care.

Of course if you can downsize to get some cash or pay off an existing mortgage this is always a better option but not always possible for some.

Re: Equity Release

I was watching a programme about this the other evening. The owners they were speaking to were all saying the same thing, they wished they had waited until they were in their late 60's/early 70's in taking out equity on their homes instead of when they did do it, (late 50's). They didn't say it was a bad thing for older people but they all regretted doing it at the younger age simply because of their age and the cost of what they had done - over time.

Re: Equity Release

Nope .. it was on the lifetime mortgage plan. After all, they are acquiring an ownership stake in your property which gives them rights.
Oh, as an aside, if you ever got a criminal conviction or bankruptcy filed against you they then had the power to immediately terminate the equity plan and settle up.
Home Inversion .. best avoided at all costs. They might go as high as 90% release funds based on the property value but basically value the property at about 60- 70% of it's market value. Fair enough, they're basing it on what it's worth to them, not you.

We were told that, an average of about 1k. In reality it would have been £200 just to open 'a file' with estimated costs of 2k.
Most do offer a guarantee against Negative Equity .. and can also factor in a reserve percentage at the initial contract stage which protects say, a 30% stake to be bequeathed to your offspring. Of course, this then reduces the amount they will initially offer you. Swings and roundabouts really.

It's all a matter of personal choice and circumstances.
There was also the expected clauses that if you divorced or remarried it would alter the contract ... and the chances are that if you remarried you might well not be able to get your new partner included on the original terms and make them a 'named' person.
In other words .. they would have to sign a document agreeing to vacate the property upon your death. I understood this to be within one month before repossession would occur. Likewise, anyone who came to live with you.

It's all each to their own. There are benefits ...especially for people who are on their own who don't have to consider kids.

Re: Equity Release

As a matter of interest have you heard of the new Interest only Retirement Mortgages for those who still own on their interest only mortgages the full amount borrowed. Apparently when the offer ends you switch to an interest only retirement mortgage which is payable on death or when you move.
This is not equity release.

BTW with home inversion plan you are a tenant in your own home until you die which is a bad idea imo.