Equity release
Discussion
My mum has a house worth 260-280k, no mortgage, pension income about 1.3k a month after tax, She is 70.
She is looking for an equity release,interest only loan or loan.
What are the best options as most likely will never sell up, until she dies, looking for 60k.
At 2% interest only about 150 quid a month, about 600 full payment over 10 years.
She is looking for an equity release,interest only loan or loan.
What are the best options as most likely will never sell up, until she dies, looking for 60k.
At 2% interest only about 150 quid a month, about 600 full payment over 10 years.
Edited by Thesprucegoose on Sunday 23 February 17:03
RIO / Retirement Interest Only loan?
https://www.nationwide.co.uk/products/mortgages/bo...
IIRC, the article I read a while back said a RIO was supposedly cheaper than an Equity release, but you should check this yourself.
https://www.nationwide.co.uk/products/mortgages/bo...
IIRC, the article I read a while back said a RIO was supposedly cheaper than an Equity release, but you should check this yourself.
Simpo Two said:
I can't help thinking that overall it's an incredibly expensive way to borrow (one's own) money.
What other solutions, a remortage/loan?At 70 can't see many offering loans. It might be expensive but it releases capital from the house and would allow my mum to stop working. I'm not fussed on it impacting any inheritance it's her house to do as she wants.
i prefer a flan said:
Seems like a decent position to be in as it stands.
Yes but CC's about 400 a month, 10-15k I think. Offered to help but stubborn. Plus house needs updating andrepairs.Looking at 60k interest only works out 60 quid a month.
I can understand people saying it's expensive, but my brother isn't bothered and I would rather my mum enjoys it now, she is asset rich but cash poor.
Thesprucegoose said:
Yes but CC's about 400 a month, 10-15k I think. Offered to help but stubborn. Plus house needs updating andrepairs.
Looking at 60k interest only works out 60 quid a month.
I can understand people saying it's expensive, but my brother isn't bothered and I would rather my mum enjoys it now, she is asset rich but cash poor.
She could explore selling the house for a reduced amount with a clause that the house is rented to her for the duration of her lifetime and cannot be sold?Looking at 60k interest only works out 60 quid a month.
I can understand people saying it's expensive, but my brother isn't bothered and I would rather my mum enjoys it now, she is asset rich but cash poor.
Thus she keeps the house till required and frees up equity?
My friend was showing me a house that had such a clause, sold for a fair bit under HR but sold within a few hours of being listed.
Thesprucegoose said:
Yes but CC's about 400 a month, 10-15k I think. Offered to help but stubborn. Plus house needs updating andrepairs.
Looking at 60k interest only works out 60 quid a month.
I can understand people saying it's expensive, but my brother isn't bothered and I would rather my mum enjoys it now, she is asset rich but cash poor.
There was an article in the Telegraph about RIO loans/mortgages:Looking at 60k interest only works out 60 quid a month.
I can understand people saying it's expensive, but my brother isn't bothered and I would rather my mum enjoys it now, she is asset rich but cash poor.
https://www.telegraph.co.uk/personal-banking/mortg...
I'd definately PM Sarnie for advice.
Thesprucegoose said:
has a house, no mortgage, pension income about 1.3k a month after tax, She is 70.
Can't you lend her the money?Either through your own savings or through a loan yourself against her signing over equity in the house?
If I had £1300 a month, on my own, with no mortgage, I'd be sitting quite pretty. What does she spend it on?
What will she spend the £60k on?
I had a family member do this. She spent £15k on a bathroom renovation that should have cost no more than half that, £7k on garden renovations that should have cost £2k and was then left overgrown, replaced individual windows rather than the whole lot - again at an inflated price.
Difficult when it's her house and her money. I get that you're not worried about inheritance, but you want to see her get value for her asset - out of sheer principle.
My Mum did equity release a few years ago unbeknown to me, she's now mid seventies and wants to go to warden assisted and the equity release people will transfer to another house, but not warden assisted. This seems to be fairly common, so if she does go down that route double check if there are any conditions like this in the agreement.
Muzzer79 said:
Can't you lend her the money?
It may be a simple thing to most PHers but I don't have 60k spare. If i did I would but that is why i am asking on here. Luckily my dad had a good policy when he died 30 odd years ago. left my mum with mortagae free house and an annuity for rest of her life. She earns miminum wage and not great with money, not the worst but no where near PH levels.
She would like money to sort house out, clear debt and a bit to enjoy life and give up working, whilst using the house as collateral. Sh won't move, i offered to help her with debts, but very stubborn.
Thesprucegoose said:
Muzzer79 said:
Can't you lend her the money?
It may be a simple thing to most PHers but I don't have 60k spare. If i did I would but that is why i am asking on here. Luckily my dad had a good policy when he died 30 odd years ago. left my mum with mortagae free house and an annuity for rest of her life. She earns miminum wage and not great with money, not the worst but no where near PH levels.
She would like money to sort house out, clear debt and a bit to enjoy life and give up working, whilst using the house as collateral. Sh won't move, i offered to help her with debts, but very stubborn.
If I were you, I would get your mum to take out as much as she can. If she needs to go into care at a later date, the council will make sure they use the sale of her house to fund her care, so there won’t be any inheritance coming to you anyway!
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