To think about Equity Release

[papayaorange]

My husband and I are mid 60's. We live in a large house we both love but are asset rich and cash poor. I suggested that we release a bit of money from the house which has a lot in it, so that we can buy a new car and have some good holidays. We only have our state pensions and a small company pension. My husband is dead against it as he says it is spending the children's inheritance. What would you do.

@HermioneWeasley

Equity release is very expensive. In 10 years time your lovely house could be a burden - expensive to maintain, hard work to clean, physically hard to get up stairs etc.

Another vote for downsizing and enjoying your money while you’re healthy

Where do you get "its expensive" from?

@yoyo1234

I would definitely downsize. Equity release appears to be for mugs .

"Appears to be" because you have absolutely no idea or any clue clearly!!

Your home is your which you have worked for inheritance is not a god given right, you worked for it enjoy some of it. X

I can understand wishing to have an enjoyable retirement. I would never consider equity release as the way of doing it myself. A smaller house would be my choice, or living in an area where house prices are lower.

Equity release schemes are generally terrible value.

I would downsize before I would do equity release.

But also I would think it would be better to downsize and not get into equity release x

Equity release isn’t right for everyone but it does have its place. What are people who don’t want to downsize (not easy if you’ve only got a 2 bed semi to start with) or move to a cheaper area, possibly away from their family, supposed to do? Equity release, if it’s done properly means they don’t have to worry and can be comfortable in their home.

The most important thing is to take independent advice.

I wouldn't worry about the inheritance, anything could happen before DC get that anyway.

My concern would be not leaving yourselves with enough equity to get something suitable if you need to move later. E.g. in this area my large 4 bed detached house is worth roughly the same as a 2bed bungalow.

@Wisewordswouldhelp

You are mad to consider equity release. The companies that run these schemes don't do it out of the goodness of their own hearts! They will always do better out of this arrangement. Please do your research properly www.moneysavingexpert.com/mortgages/equity-release/ and www.theadvisory.co.uk/sell-house-fast/equity-release-schemes-pros-cons/ and seek the advice of an independent financial advisor. I would chose downsizing a million times over than equity release!

All of this, above.

Downsizing retains your capital best. Equity Release is essentially a remortgage on terrible terms.

Hmmmm @SpellBounds post :
yoyo1234

I would definitely downsize. Equity release appears to be for mugs .

"Appears to be" because you have absolutely no idea or any clue clearly!!

Actually I have quite a bit of experience from family experience etc.

@VickyEadieofThigh 's post:

Wisewordswouldhelp

You are mad to consider equity release. The companies that run these schemes don't do it out of the goodness of their own hearts! They will always do better out of this arrangement. Please do your research properly www.moneysavingexpert.com/mortgages/equity-release/ and www.theadvisory.co.uk/sell-house-fast/equity-release-schemes-pros-cons/ and seek the advice of an independent financial advisor.
I would chose downsizing a million times over than equity release!

All of this, above.

Downsizing retains your capital best. Equity Release is essentially a remortgage on terrible terms.

I agree I would downsize.

@yoyo1234

Hmmmm *@SpellBounds* post : yoyo1234

I would definitely downsize. Equity release appears to be for mugs .

"Appears to be" because you have absolutely no idea or any clue clearly!!

Actually I have quite a bit of experience from family experience etc.

You've still not got a clue! Clearly!

[quote yoyo1234]@VickyEadieofThigh 's post:

Wisewordswouldhelp

You are mad to consider equity release. The companies that run these schemes don't do it out of the goodness of their own hearts! They will always do better out of this arrangement. Please do your research properly www.moneysavingexpert.com/mortgages/equity-release/ and www.theadvisory.co.uk/sell-house-fast/equity-release-schemes-pros-cons/ and seek the advice of an independent financial advisor.
I would chose downsizing a million times over than equity release!

All of this, above.

Downsizing retains your capital best. Equity Release is essentially a remortgage on terrible terms.

I agree I would downsize.[/quote]
What are the current rates for Equity Release

I said yabu but only because I worry about equity release not because you should leave an inheritance.

Wouldn't selling up and buying smaller be a better way to release cash? You definitely should spend your money and enjoy yourself. I know equity release has improved recently but they always were a dodgy scam that could leave you homeless if you lived a long while.

@DeepaBeesKit

Equity release schemes are generally terrible value.

I would downsize before I would do equity release.

Do explain how they're terrible value?

I have a very good clue , thank you .

@Rainartist

I said yabu but only because I worry about equity release not because you should leave an inheritance.

Wouldn't selling up and buying smaller be a better way to release cash? You definitely should spend your money and enjoy yourself. I know equity release has improved recently but they always were a dodgy scam that could leave you homeless if you lived a long while.

It might be worth you doing done more research, because they're certainly not "dodgy".

@yoyo1234

I have a very good clue , thank you .

Clearly not, you've not said anything tangible as to why the current equity release/lifetime mortgage plans are a poor choice.

I'm going against the trend here to say I think equity release, if done well, can be a fantastic way to enjoy your retirement and stay in your own home.
Having helped a relative navigate their way through their application, (with many doubts about it myself), I was seriously impressed with what is available, and how it worked out.

It is offered by reputable banks and building societies with safeguards that can protect your home and remaining equity.
My relative opted for a fixed rate ER loan with the option to pay monthly interest, so the amount owing never increases. It's at a very low interest rate fixed for life - so they always know what the payments will be and how much is owed. If they choose to, they can stop paying interest which will then roll up until the house is sold on their passing, or after a year in a care home; but the amount owing will never amount to more than the value of their property.
They were advised to borrow the minimum they needed at the time and increase it later if needed, to reduce the interest owing overall. There were no fees to pay on application.

The loan can be repaid in a lump sum of 10% each year, or repaid in it's entirety without penalty after 10 years. It can be ported to another property without penalty if my relative chooses to move.

@seekingasimplelife

I'm going against the trend here to say I think equity release, if done well, can be a fantastic way to enjoy your retirement and stay in your own home. Having helped a relative navigate their way through their application, (with many doubts about it myself), I was seriously impressed with what is available, and how it worked out.

It is offered by reputable banks and building societies with safeguards that can protect your home and remaining equity.
My relative opted for a fixed rate ER loan with the option to pay monthly interest, so the amount owing never increases. It's at a very low interest rate fixed for life - so they always know what the payments will be and how much is owed. If they choose to, they can stop paying interest which will then roll up until the house is sold on their passing, or after a year in a care home; but the amount owing will never amount to more than the value of their property.
They were advised to borrow the minimum they needed at the time and increase it later if needed, to reduce the interest owing overall. There were no fees to pay on application.

The loan can be repaid in a lump sum of 10% each year, or repaid in it's entirety without penalty after 10 years. It can be ported to another property without penalty if my relative chooses to move.

Sounds like all the exact terms of Nationwide Building Society. They seem to be offering good options at the moment.

Please take good advice on this the interest on these things are massive. When the time comes that you need care or are no longer with us. There will be about 30% of your asset left

I deal with equity release when it's to be paid back. Please speak to an independent financial adviser before you do anything. 60 is young in terms of the length/term of the policy. I've seen many disputes and children telling us they didn't know their parents had ER and the loan repayment amount is so high there is no inheritance. So if you do go for it, it's always best to let you kids know.

@unicornsarereal72 - 'the interest on these things are massive'

A common misconception, but simply not true in my experience. The interest rates offered at the moment are excellent and comparable with current mortgage rates... and on ER they are fixed for life.
Of course if you opt not to pay the ongoing interest it will roll up over time, but reputable lenders now take a great deal of care and time to illustrate how this works, and provide clear examples based on your own borrowing decisions.

The actual interest rates are very favourable at the moment.

@seekingasimplelife

I'm going against the trend here to say I think equity release, if done well, can be a fantastic way to enjoy your retirement and stay in your own home. Having helped a relative navigate their way through their application, (with many doubts about it myself), I was seriously impressed with what is available, and how it worked out.

It is offered by reputable banks and building societies with safeguards that can protect your home and remaining equity.
My relative opted for a fixed rate ER loan with the option to pay monthly interest, so the amount owing never increases. It's at a very low interest rate fixed for life - so they always know what the payments will be and how much is owed. If they choose to, they can stop paying interest which will then roll up until the house is sold on their passing, or after a year in a care home; but the amount owing will never amount to more than the value of their property.
They were advised to borrow the minimum they needed at the time and increase it later if needed, to reduce the interest owing overall. There were no fees to pay on application.

The loan can be repaid in a lump sum of 10% each year, or repaid in it's entirety without penalty after 10 years. It can be ported to another property without penalty if my relative chooses to move.

👏 👏 👏

@unicornsarereal72

Please take good advice on this the interest on these things are massive. When the time comes that you need care or are no longer with us. There will be about 30% of your asset left

Is it? What rates are being charged, do tell me!