Pros and cons of "Equity Release for Dummies" required.
Age Partnership will help advise, for 1.6% of anything we get. I assume the greedy barstewards also get commission from whoever does the lending too.
Is it a 'Closed Shop' or can we cut out the 'middleman'?
If so, who do we approach, what do we need to know?

The fees/costs will be eye watering but you can't take it with you... and they know that.

Just make sure you can't be chucked out before you die.

As far as I know you can go direct, and don't need to go through a broker.

Dine with a long-ish spoon.

http://www.thisismoney.co.uk/money/mort ... lease.html

It's my personal belief that equity release will be the key factor that will bring the British housing market down to more normal levels over the coming 10-20 years. As boomers, whose kids have now mostly fled the nest, are incredibly house rich but cash poor as stock market and bond returns are small, release equity (as well as downsize) to fund their retirements. It's going to become the fashionable thing to talk about at dinner parties, like BTL. Then, after 10 years say, the banks will become concerned about the effects of compound interest and all these old fogies who aren't dieing off as soon as they thought, will start reposessing homes and starting a tide of forced sellers - but that's alright .... house prices only ever go up, right?

Like all financial fashions, it'll work out well for the smart early adopters, not so for the masses.

Just my thoughts.

They can't do that under a home reversion plan. They wouldn't get court orders for obviously illegal possessions.

Lowtimer wrote:They can't do that under a home reversion plan. They wouldn't get court orders for obviously illegal possessions.

Really? Are these loans not secured?

What would be the effect of a situation where a large chunk of the population were in negative equity, unable to service debts and banks were unable to repossess their assets?

You don't understand the schemes

Under a lifetime mortgage the debt is not supposed to be serviced via repayments of either capital or interest. Interest is rolled up and when you die it is met (or not) out of the sale of the property. The risk is that of the lender, not of the borrower, which is why you can't raise terribly large proportions of the initial valuation of the house

As there are no repayments to default on, the resident of the house is not going to be in breach of lending terms, so there are no grounds for the lender to ask a court to grant possession.

A home reversion scheme is a deferred partial sale: no interest.

Go read the article I pointed to earlier.

I have a naturally sceptical view of equity release schemes. However, I can see the attraction for those retirees who are still active and healthy, short of much disposable income, and who don't have children. I know a retired couple in that position who intend to use one to fund travel while they are still able.

You can't eat your house, so for those stretched to meet increasing household bills they can also offer some practical solution. With the constant hikes in energy prices, if increased numbers of people choose to use this to keep the wolf from the door, I wonder how much the market can absorb?

I suggest that informed and impartial advice is essential before signing up.

If the Lib Dems have their way with increased property taxes, we may see a lot of cash poor / asset rich pensioners either moving house or going down this route.

PW

We've looked at a number of these schemes now the kids have flown and we're rattling round in a bloody great house with an acre of garden(which I hate doing and 'er indoors following surgery to hand joints can no longer do).

Came to the conclusion downsizing was far preferable to equity release in view of various horror stories on TV consumer programmes.

Whenever I look at all the accumulated carp in the loft, garage and four sheds however I kinda go off the moving idea..............

Pete S wrote:Whenever I look at all the accumulated carp in the loft, garage and four sheds however I kinda go off the moving idea..............

E-Bay is your friend. Your carp is someone else's treasure.

PW

For a given value of "friend", yes. It's amazing how much effort goes into packaging and posting stuff without making much of a visible dent in the pile of shyte. However, I have recently been able to use my PayPal account to fund stays in nice B&Bs without it costing real money, so I must be doing something right.

I very much agree that downsizing in most cases better than equity release on economic grounds, but some people just don;t want to move, especially the very old.

As implied in the first post I am a financial 'thicko', therefore fail to see how 'downsizing' can give me money to spend?
We have no mortgage, and I got the place down-rated to band A for paying my share of the £180,000 to the chief Councillors wage bill. We get a rebate on that anyway, so for that exercise it may as well be band D...
Being the wrong side of three score years and ten all we want is a few bob to enable us not to have to choose whether we pay Calor gas or the water board this month...If the car goes tits up of course, neither get paid.

Sellbydate_Expired wrote:As implied in the first post I am a financial 'thicko', therefore fail to see how 'downsizing' can give me money to spend?

Sell your house for £100 and buy a smaller house for £50. Trouser the balance and spend on hookers and charlie.

Sellbydate_Expired wrote:As implied in the first post I am a financial 'thicko', therefore fail to see how 'downsizing' can give me money to spend?

Let's say current house sells for £600k (I wish)

We buy a small three bed bungalow with minute (preferably concreted) garden for £300k.

And we trouser £300k.

Where's the difficulty in that?

And: we have two kids who are as poor as church mice who might as well have some of their inheritance now (say £50k each) We still have £200k to fund some nice hols before we go ga-ga.

Problem with equity release is that if we live too long (say another 15 years) the rolling up mortgage interest might approximate to close to the property's value and the kids get SFA.

That's my take on things: am I miles out?

Hmm Joe C beat me to it but has given me some brilliant food for thought (or was that snort?)

Peter

If thinking about any sort of equity release then assume your children are not going. to inherit your house, or indeed anything of substance. If you have cash to spare, you don't need to do equity release. If you don't have cash to spare, then they won't be inheriting your spare cash. If you do equity release, best to assume it will consume all your house. If you sell your expensive house and buy a cheap house, they might get to inherit your cheap house.