Equity Release

[Gusta]

Does anyone know about equity release?........ I am 55, have no children or family to leave my money to so if I don't use it for my (future) care then it will most probably go to the state - could do with a bit of money at this moment so is this a good idea?
Thank you so much for answering

[woofgang]

This looks like a good place to start. Be careful.
https://www.moneyadviceservice.org.uk/en/articles/equity-release

[frugalfred]

It's important to get INDEPENDENT advice rather than relying on reps. of finance companies for advice.

[SirOracle]

As a general principal you appear to be quite a few years too young to be considering this type of solution.

As already stated please be very circumspect here.

[ubasses]

Also make sure any Company you look at is member of SHIP

[atalanta]

My aunt did this. Without going into detail, it was a disaster. A great deal of money was lost.

[SirOracle]

The OP has not appeared again on this thread,but despite this I am making a suggestion concerning his "could do with a bit of money at this moment".

A far better solution for him would be to increase his mortgage,or if there is no mortgage on the property,then take out a mortgage.

The advantages of this are way ahead of ANY of the equity release schemes on the market.

[Peter Pedant]

no it is a terribly bad idea

[SirOracle]

I presume Peter that it is the equity release,and not my alternative suggestion, that you are debunking.

[saxy_jag]

I'm the same age, have inherited my home from my parents and am looking to do the same thing myself. I've done a lot of homework and in a couple of months will be ready to start looking at illustrations and quotes. And there has been a fair amount of that 'homework'. I've had some good advice from Key Retirement and also from Age UK.

You have to be honest about the value of the property, about how much you want/need and what you want to do with it - don't be greedy. In any case most lenders will only let you have up to a certain percentage of the value of the property. In my case I want to get the house put into good order - new windows, upgrade heating etc., so that I can go into my retirement without having to worry about that, and so that when I do either go into care or pop my clogs, it will hopefully have a little more value. I've also spoken to my kids and explained what the situation will be when that does happen. Their response was that they have never expected to be left a huge legacy in any case and there are more things to inherit than money.

You've said that you don't have any children/family to leave the house to. In which case, make a will, so that if there is anything left after paying the money back then it can at least go to a favourite charity rather than back into the government's coffers.

And for the suggestion that the OP could either increase or take out a mortgage? You're assuming that, at 55, they are able to afford this or are even able to get one. I know could do neither!

As I've said, nothing wrong with it, but do your homework and take your time.

[dasherman]

Equity release is effectively a mortgage in reverse, so you will start off owning the house outright(or almost outright) and as the interest on what you borrow mounts up, you will own less and less of the house in percentage terms.

As a rough guide what you owe on an equity release loan will double every 10 years. So if you release say £40,000, in 10 years time you will owe £80,000 and in 20 years time you'll owe £160,000, etc. Increases in market value could negate things a bit but the danger is that you'll effectively be selling your house for £40,000 based on my example figures.

Everybody's situation is going to be different but as a general rule, the younger you are the worse a decision doing equity release is. It's something you do at perhaps age 75-80 or older, doing it at 55 is madness.

[Gusta]

Thank you so very much for all the lovely people who gave me so much sound advice - Each one of you have given me food for thought :)