big bad lindz Posted December 30, 2016 Report Share Posted December 30, 2016 A few questions regarding equity release. has anyone on PW done it Is it a worth while option what are the up & downs what`s the average cost I have looked at some of the options currently advertised on the net but without making a commitment for an interview with some financial `shark` I am trying find out as much as I can before doing so. I am 60 next year and I have been working in the North Sea for the last 30 years and I now feel it is time to hang up the boots. I may not stop working and look for something nearer home just for some beer money etc, but not sure if I would have sufficient savings & pensions to keep me going. The house is paid off and we have no young family and don't intend to leave any inheritance to anyone but we would like to be comfortably off into our latter years. So if and when we do go for advice are there any pertinent questions that we should be asking cheers, BBL Quote Link to comment Share on other sites More sharing options...
TaxiDriver Posted December 30, 2016 Report Share Posted December 30, 2016 Could you realise any Capitol if you were to downsize rather than go the equity release route ? Quote Link to comment Share on other sites More sharing options...
Cranfield Posted December 30, 2016 Report Share Posted December 30, 2016 In the circumstances you describe and assuming you have no dependant children (or anyone else, apart from a wife) living with you , then downsizing will probably be the most financially efficient option. I looked at equity release for my SIL about 4 years ago and consulted Financial Advisers who were friends, the final consensus was that the older you are the better it is. "Older" was pitched at over 70. Even the "best" schemes mean you give up quite a bit of equity for a small return and the younger you are the more you give up and the smaller the return. Those offering these schemes base returns on the calculation of how much longer you are going to live. My comments are only based on my experience and the advice we were given by totally independant people. No doubt others have had better experiences and they may chip in. Quote Link to comment Share on other sites More sharing options...
four-wheel-drive Posted December 30, 2016 Report Share Posted December 30, 2016 Could you realise any Capitol if you were to downsize rather than go the equity release route ? That would be my option I just do not trust these people who do this sort of thing not to take advantage of you have you worked hard all of your life only to give it away to some bank. Quote Link to comment Share on other sites More sharing options...
Newbie to this Posted December 30, 2016 Report Share Posted December 30, 2016 If you go with equity release you will not own the house anymore, in my opinion it is legal theft and I would never consider it as an option. Downsizing (if possible) as TaxiDriver mentioned would be a far better choice. Bear in mind equity release is only a loan and if you don't repay this loan they will end up owning the whole house with only lending a small percentage, and the interest rate will be shocking. Quote Link to comment Share on other sites More sharing options...
johnphilip Posted December 30, 2016 Report Share Posted December 30, 2016 Sell up and just rent, we did this 9years ago. Quote Link to comment Share on other sites More sharing options...
bruno22rf Posted December 30, 2016 Report Share Posted December 30, 2016 Might at least protect you from being robbed if you ever need to go into a care home? Quote Link to comment Share on other sites More sharing options...
bostonmick Posted December 30, 2016 Report Share Posted December 30, 2016 If you have no relatives or others you wish to pass it onto when you pass.i would suggest you take advice from a couple of these companies. It costs nothing to ask.also if they take full ownership when you do pass does it matter.get some figures and go from there. Quote Link to comment Share on other sites More sharing options...
daveboy Posted December 30, 2016 Report Share Posted December 30, 2016 Sell up and rent...The wife works in a bank and has had loads of people who have lost out to these schemes. One of there tricks is to hold money back for "repairs" They then tell you it needs a complete rewire,Damp treatment and a new central heating system and they have people who will do the work for them. One couple were charged £20,000 for "repairs" Quote Link to comment Share on other sites More sharing options...
B25Modelman Posted December 30, 2016 Report Share Posted December 30, 2016 Never ever do anything where some other person or company owns a part. Those happy smiling faces change immediately you have signed the documents. Quote Link to comment Share on other sites More sharing options...
grrclark Posted December 30, 2016 Report Share Posted December 30, 2016 Only anecdotal tales from me, but from those I know who have gone down this route there is a lot of unhappiness. I am sure some of that is through unrealistic expectations or wishful thinking however. Do you have a pension fund? If so then I would suggest speak to a good independent advisor, even if that costs a few bob, about what options may exist with your pension, now the rules have changed there are a lot more options. As others have said it is worth considering selling up entirely and renting. If you can combine both pension fund and proceeds from a house sale it may give you opportunities to do something different. 60 is still relatively young and you don't want to be boxed into a corner. Quote Link to comment Share on other sites More sharing options...
Lord v Posted December 30, 2016 Report Share Posted December 30, 2016 (edited) My parents are in the same position as you and went for the downsizing route. Works out far better and they have gone for a place that can be easily modified for elderly care if needed. Neither of them wants to move again after this. They looked at the equity release schemes and they were all terrible once you get into all the penalty clauses. Edited December 30, 2016 by Lord v Quote Link to comment Share on other sites More sharing options...
Twistedsanity Posted December 30, 2016 Report Share Posted December 30, 2016 Not sure if this is relevant somehow but my nan got alzheimers and the council put a charge on her house to pay for her care, maybe equity release would be a way of avoiding a situation like that should the worst ever happen to you or your better half? It's not a nice thing to think about but a little forward planning could pay dividends in years to come. Quote Link to comment Share on other sites More sharing options...
Dave-G Posted December 30, 2016 Report Share Posted December 30, 2016 (edited) I'm watching this with interest as it looks like a route I have little choice but to take soon. We are one of Teresa May's 'Jams' families - from council estate backgrounds: We Just About Managed - to buy our first house late in life and finish paying for it. At 65 I have just reached the dizzy heights of receiving the first cheque of my state pension next month as our sole income. The Mrs will start drawing hers in two months. That's about £270 PW between us to pay our way in life. The house needs some minor work doing to it - conservatory roof being the biggest thing to worry about, but we'd also like to have enough in the bank to pay our funeral costs when the time comes. We're constantly in minor debt that we simply cannot shake off, that sometimes means living on credit cards... with expensive long term interest anyway. Now I'm retired I won't be able to carry on paying that out of our pensions. It's only a two bed semi so downsizing isn't an option - and we love it here and want to stay in our quiet little pile. I'm aware the loan doubles about every 10 years but since the value of the house nearly trebled in the 17 years we've had it I think its value will continue to rise at a broadly similar rate. Though I feel shame at having to draw from the kids potential inheritance it will hopefully still set each of them up with a tidy sum towards their own house payments in years to come... assuming they even manage to get on the property ladder that is with house prices rising the way they are. Edited December 30, 2016 by Dave-G Quote Link to comment Share on other sites More sharing options...
sishyplops Posted December 30, 2016 Report Share Posted December 30, 2016 Sell the house and rent somewhere, then the landlord has to look after the repairs, yes it costs to rent but you will have a large equity in the bank that will accrue some interest that can offset the rent, have the money and enjoy yourself Quote Link to comment Share on other sites More sharing options...
snow white Posted December 30, 2016 Report Share Posted December 30, 2016 We sold up 12 years ago best move we did. Quote Link to comment Share on other sites More sharing options...
Dave-G Posted December 30, 2016 Report Share Posted December 30, 2016 Sell the house and rent somewhere, then the landlord has to look after the repairs, yes it costs to rent but you will have a large equity in the bank that will accrue some interest that can offset the rent, have the money and enjoy yourself As I understand things, although the proceeds of a single home are not taxed, any interest the funds gain is taxed, but interest is not a lot anyway for savers. I could be wrong but that sounds more expensive over the course of maybe 20 years - say £600 PM rent VS interest? Quote Link to comment Share on other sites More sharing options...
sishyplops Posted December 30, 2016 Report Share Posted December 30, 2016 Yes you're right of course but putting £100k + into savings and investment funds, whilst it won't cover the rent it will take off a lot if pressure by having that capital in the bank, in Germany most people rent it's just us British that likes to own our own castles Quote Link to comment Share on other sites More sharing options...
itchy trigger Posted December 30, 2016 Report Share Posted December 30, 2016 Sell up and just rent, we did this 9years ago. the best solution. I did this some years ago, sold up to release the capitol, went to live in a cottage for a few years, £450 pcm no water rates as spring fed, moved west in February, 18th century detached 3 bed, again no water rates, £500 pcm, will move again if I feel like a change, no pockets in a shroud, enjoy spending 'your' money, you worked for it, who ever its left to will spend it a lot faster than you were able to save it, Quote Link to comment Share on other sites More sharing options...
Lloyd90 Posted December 30, 2016 Report Share Posted December 30, 2016 Might at least protect you from being robbed if you ever need to go into a care home? It's hardly being robbed when the tax payer is footing the (incredibly expensive) bills, it's expensive to provide round the clock care. Quote Link to comment Share on other sites More sharing options...
UKPoacher Posted December 30, 2016 Report Share Posted December 30, 2016 It's hardly being robbed when the tax payer is footing the (incredibly expensive) bills, it's expensive to provide round the clock care. I thought that paying taxes for all your working life would be contributing to your future health care. Quote Link to comment Share on other sites More sharing options...
Walker570 Posted December 30, 2016 Report Share Posted December 30, 2016 (edited) Equity Release can work out fine. Just do your homework first and find a reputable company to set it up with a reputable building society. In a way it is a back to front mortgage. DO NOT as some do take a lump sum and blow it all on a new car etc., arrange a sensible monthly amount paid into a separate bank account to your normal one and use that just for those special needs. It can work very well. Pull up Key Retirement Solutions. Edited December 30, 2016 by Walker570 Quote Link to comment Share on other sites More sharing options...
B25Modelman Posted December 30, 2016 Report Share Posted December 30, 2016 (edited) Selling up and renting may well be an option but it depends on what your retirement hobbies are. I enjoy DIY and tinkering so require tooling and an outside workshop to do it. You cannot always get that from a rent or if you could you would be renting a fair sized and expensive property. You may well be asked to leave, before term, so where does all that equipment go. We did not go over the top all those years ago when we bought our house so its about mid size, well hidden garden, with a workshop and garage (full of junk). I have converted one small bedroom into wife's workroom and another for the grand children when they stay. Edited December 30, 2016 by B25Modelman Quote Link to comment Share on other sites More sharing options...
bostonmick Posted December 30, 2016 Report Share Posted December 30, 2016 At sixty you could quite easily have another twenty plus years left.so if you sold up and rented you would need to set aside somewhere in the region of 180k to cover rent etc.so you have gone through all the hard years of getting mortgage free only to take on paying someone else's mortgage.also you need to look at the security of your tenancy.how many landlords put the tenant out to sell the property after a few years.so therefore leaving you to pick up further expense and stress locating a new home.and all this in your last year's.an englishmans home is his castle.just better to be your own castle rather than someone else's. Quote Link to comment Share on other sites More sharing options...
bornfree Posted December 30, 2016 Report Share Posted December 30, 2016 Be very careful of which company you use. My late father signed up to one of these schemes luckily he had forgotten that I owned 1/3rd of the property,his mind wasn't as sharp as it used to be. The first I knew about it was two representatives from the equity company calling at my house with forms to sign the house over to my father. They had not done the correct checks and had been caught out by my ownership. They became aggressive when I refused and would not leave but iam extremely stubborn so after an hour they left empty handed. Later at my fathers looking at the paperwork the valuation was very low and charges were very high with electrical, heating and plumbing checks annually. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.