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Original poster

Equity release

15 replies

TheHodgeoftheHedge · 20/08/2018 17:20

Hey guys, was wondering if anyone has any real life experience with this and can point me in the direction of whether I should be saying "hell yes" or "hell no". Not even sure if this is the right place to post it!

My parents are in their mid 80s/70s, and own their own house. They have no savings or investments and the house is really their only asset.
They are contemplating doing a form of elderly equity release. There is some minor work they need to have done around the house but are now getting a little carried away with thinking about other things they could do and they really want to be able to give me and my siblings some money (please note we have not asked for this and have no need for this).
Has anyone any experience of this? Any dos/don'ts? I have no idea what to advise them at the moment but my immediate gut reaction is company's preying on encouraging elderly people to do this can't exactly be wholesome and I can't see how giving away your only asset is a good idea...

Thanks in advance.

OP posts:
cubscout · 20/08/2018 18:59

Hell no! My Uncle did this and when he died the company took the remainder of his property and his children got nothing. The amount of equity released was nowhere near what his property was worth.
Please urge them to find another way to get the work done? Age Concerns often have grants/loans

Original poster
TheHodgeoftheHedge · 20/08/2018 19:37

Thank you @cubscout that is EXACTLY what I was afraid of and the only way I could figure these companies make money.

OP posts:
NotSuchASmugMarriedNow1 · 21/08/2018 16:51

Would it not be better to downsize?

Original poster
TheHodgeoftheHedge · 21/08/2018 17:07

Thanks, but they love the house - it’s been the family home for 50 years and the primary reason for wanting the money is to fix a few things on it. The last thing in the world they want to do is to move. Although obviously that option is reserved for desperate times.

OP posts:
grumiosmum · 21/08/2018 20:52

I think equity release used to have a really bad reputation, but i understand there are some better schemes available now.

Can they get independent advice from a financial adviser?

Original poster
TheHodgeoftheHedge · 22/08/2018 14:58

Thanks grumiosmum.

Can they get independent advice from a financial adviser?

That's what I've suggested too, but a good financial adviser does not seem to be easy to find or cheap ;)

OP posts:
CuddlesAndShit · 22/08/2018 15:09

A family member just did this. She had someone come round from Which (I think) who talked to her and advised her of the different equity release companies and which ones would be best suited for her.

Imo they are fucking scandalous and hopefully will be the next PPI scandal so at least people can get some of their money back. Even the one she used cost silly money in arrangement fees, then she had to pay a specialist solicitor on top. Thats without the extortionate repayment at the end (especially if she stays in the property for another 15 years).

I'm sure there are positives but I think they are disgusting and exploitative, akin to payday loans.

Grin
grumiosmum · 22/08/2018 17:55

OP a good financial adviser is probably worth what you'd need to pay them in terms of money or future problems they'd save.

But I agree, they aren't easy to find.

frenchfancy · 22/08/2018 18:02

Fil did this. He died 3 weeks later and equity release company were laughing all the way to the bank.

user1487194234 · 22/08/2018 18:12

They are what they are
Ok for people who don't have family they want to pass £ on to
Better to enjoy some money when you can than go into a nursing home and have it all used to pay for care
The situation where you sign up and die 2,weeks later and lose the whole lot was common 20 years ago but shouldn't happen now

guessmyusername · 23/08/2018 21:01

My parents did this without any input from their children (my sister works in finance!) and what they originally borrowed quickly doubled so at a point in time when they had to leave that home to move somewhere more suitable for their needs, they did not have enough left to buy anywhere and so family had to help them out. My dad then said it was a mistake and he wishes he never did it.

Outnumbered99 · 24/08/2018 14:18

It can be a good thing in the right situation but is not right for all. I know someone independent that could talk to you whereabouts are you? There are probably companies local to you that would at least talk you through how it works for free?

CreativeMumma · 24/08/2018 14:39

i'm not sure if its the same thing but my in-laws are looking at a life time mortgage where they can borrow 40% of the worth of the house.

MadeForThis · 24/08/2018 14:56

I think it's the equivalent of a pay day loan. Unless target are desperate for the cash I wouldn't do it.

Shutupsidney · 25/08/2018 20:53

I'm a chartered IFA and equity release is the option of last resort. Buyer beware

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