Any Drawback To Equity Release?

[lynbrown]

We own our house and I would like to take some money, approx 20% of its value, out of it to give to our kids. My husband says we would need to pay interest on this 'loan' and it could eat into the remaining 80% value of the house. Any advice please?

[kjn2]

http://www.ageuk.org.uk/money-matters/income-and-tax/equity-release/

[Everhelpful]

Look into it very carefully and then DON'T do it,you will regret it. I did.

[grasscarp]

Great answer Everyhelpful.

[Gizmonster]

I say don't do it.
It's not as if the money is desperately needed for anything .... make the kids do what most other people have to do ..... and that's wait until their parents go and meet the big fella in the sky !!

[Everhelpful]

Thanks,grasscarp,it cost me £42000 to finish it after I only borrowed 11000 Five years ago,that's how quick the Interest adds up.

[lynbrown]

Wow, I dont want to get caught in that trap. Thanks for advice.

[Graham-W]

Also, I think, if you take equity release and give it to the children and then end up in a care home, the council can assume you did it to avoid care home costs and chase the children for its return. There is probably a time limit for this. Possibly seven years, but check before you leap.

[anneasquith]

everhelpful. are you saying you released £11000 and you paid £8400 per year for 5 years ?

[Everhelpful]

Just checked Ann,it was 7 years ago,Still a lot though,I got BAD advice to start with.Never again.

[Ann]

We also have been thinking of doing ER, as we don't have any children to leave our house to (only other family members) In our situation can you think of any drawbacks? We could really do with some ready cash now to replace our old kitchen and carpet right through.

[hc4361]

Ann, this is an informative and up to date article
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/10593930/Equity-release-is-it-time-to-cash-in-on-booming-house-prices.html

[Everhelpful]

Ann,Probably OK in your case,as long as your Family Members aren't expecting anything.however,use a reputable Company like Aviva,etc and listen carefully to what they tell you.Don't get caught in any trap like me. Good Luck.

[Ann]

Thanks hc, will have a good read x

[Ann]

Thanks Everhelpful, will bear that company in mind if we ever decide to take the plunge!

[hc4361]

If I need to raise money - or want to - I won't hesitate to do it in my later years.

[anneasquith]

thanks for answers. I think saga have been mentioned for advice.

[Lindylou]

All according how old you both are. If you're in your 50's then NO. If you're in your late 70's or 80's then maybe. Check it out. Nothing is payable until you snuff it but then it comes out of your estate via a charge on your property. Check it out!! Also, do you want it for holidays/good times or to do maintenance on your property or even just to live better. You might be better off selling up and moving to a smaller property and blowing the profit.....