Equity

Has Anyone Successfully, gone down the Equity route
on their house.

Also, what are the pros and cons of this.

I have as yet not heard anyone recommend this, so if
you have taken the Equity route, are you glad or not?

sara

Re: Equity

Hi Sarah, do you mean the thing where you part sell your house to release some capital ? My neighbour looked into this some years ago and to me it looked a very expensive way of release your capital. I wouldn't go down that road unless I was desperate.

Re: Equity

Hi sarah

I did this to buy a house in Spain where my partner and I were going to retire to. Sadly he died last year and I now want to sell the house as couldn't live out there on my own but the Spanish property market is pretty dire so I am not holding my breath. It seemed a better way of doing it than taking out a Spanish mortgage though.

Re the pros and cons it is not too bad for me as it will die with me and someone will sell my house to repay Aviva. I have no family to leave my estate to so it matters not to me. When I move to Norfolk I will have to pay some back as property prices are lower there but I will still make money on the move. The interest is quite high so if you have children/grandchildren you want to leave your house to then it may not work for you. My estate goes to the dogs trust and hopefully when all is said and done they will get something.

I hope this is of some help. PM me if I can help further.

Val

Re: Equity

I think, as Val has already intimated, that it is easier to decide this question if you are not too worried about retaining the value of your estate at the time of your death.

Personally I think offspring should make their own way in life
as we have, so although our children will be welcome to anything that is left when we are gone, until then we will do whatever is practical to make our lives comfortable, and if that involves liquidating some or all of our property to raise cash for our comfort or care then that is what we will do.

I would say, however, that there are a myriad of different schemes out there, and a consultation with an independent advisor would be well worth considering before committing to go down any particular route...

Re: Equity

Barry is right sarah. I went through Key Retirement Solutions who explained all the options very clearly. Also I'm not sure how old you are but the minimum age requirement is 55 and there is far more choice when you are 60 and older.

Re: Equity

Thanks for your reply Alan, yes thats the
sort of thing I was talking about

sarah

Re: Equity

hallo val,plantman and alan grateful for your

replies.

Food for thought!

This year had a very dear friend of many years, suddenly
go from well and healthy to dementia in a matter of months.
He is now in a home.

This is why Im having serious thoughts about the next
stage of my life, hence equity or something!! If you get
what I mean.

Val will pm you

sarah

Re: Equity

My younger daughter trained as a solicitor and I remember her advising strongly against this, mainly on grounds of the diminished residue when you died or had to give up your home for good.

So, if you want to leave something to your family, it's not a good idea.

Re: Equity

I would love to know exactly how this works, please, i.e.:

1. Do you get a lump sum of money on the current house value, or part thereof? For example, if the house is worth, say £90,000, would you be given £60,000?

2. Do you get to stay in your house rent-free until you die?

I keep hearing about this equity release, but I've never properly understood it, so any clarification would be much appreciated - in simple terms please, as I'm just a simple person.

Re: Equity

Mollie, there are a couple of schemes and you need careful advice before considering any.

1. You can sell all or part of your house to a 'Reversion' company.
When you die, or move to a care home, you get a percentage of your remaining share - maybe 40% or 50%.

eg house is worth £100k. You sell 50% and get £50k. Years later, you pass on and the house is sold. Your estate gets say, 40% of £50k = £20k.

2. You get a 'life time mortgage' on a part of the value your property. You don't pay any interest - this is taken from the sale price.
eg house is worth £100k. You get a 'mortgage' for £50k. When you pass on, the house is sold for £100k. You owe £50k + £30k interest = £80k so your estate gets £20k.

As I understand, yes, you get to live rent-free till you die, though as in case 1, if you sold all of your house, you would technically be a tennant.

BUT ... you must take proper independant advice on this and I'm not sure about any tax implications.