Equity release

[Timetoleave]

I’m sure I know the answer already…but…has anyone of you bright chaps used equity release ? I’m thinking of encouraging my 91 year old surviving parent to do it - for my benefit. Tax implications? Thx

[greengreenwood7]

yep, did so to facilitate buying current house last yr - as didn't want to go 'cash only' - would rather have a small mtge and stay fully invested.
( for us we just pay each mth like a normal mtge, but the option is there to just take the cash and let the interest accrue).

v.easy to set up, long as property is 'standard' construction the valuation didn't involve survey/someone going to the property, obvs just done on %value and as longas the proposed 'value' is sensible then no issues.

served a purpose for us, and couldn't fault the process.

[covmutley]

No experience, but I was speaking yo someone who sells these products. She was saying the market has matured a lot in the last few years with much better products available.

Makes sense with so much of peoples money tied up in their house. And because Rachel reeves will want all that money.

[Timetoleave]

Interesting..I’m assuming that the big names involved in offering it nowadays have decided that the product is safe / reputable and not going to lead to another round of compo / class actions…I might have a chat to some of them

[Simpo Two]

How much money does the equity release company get out of the deal? How much are you losing in total? Or gaining due to some cunning tax plan I haven't fathomed? Do you stand to inherit the house anyway?

[Ducati996R]

covmutley said:

No experience, but I was speaking yo someone who sells these products. She was saying the market has matured a lot in the last few years with much better products available.

Makes sense with so much of peoples money tied up in their house. And because Rachel reeves will want all that money.

I did for a few minutes think about this product myself for the very reason you stated [Rach from accounts ]…but all the bad press and the thought of the rolled up interest put me off …but will watch this thread with curiosity

[wrencho]

Potentially left it a bit late at 91? If any monies are gifted they could be subject to IHT under the 7 year rule.

There's also the issue of effectively transferring a home into cash for your parent. Could this have an impact on cost of any ongoing care if required?

Feels like it might be one to play out to its natural conclusion...

[TheK1981]

This is something im looking at potentially doing, aged 43, never married, no kids, house will be paid off in 7 years, currently worth about £325k, at present everything will go to my brother who really doesnt need the cash,

Someone I worked with did it at 60, bought a place in Spain half the cash, said that it worked out well for him as he has cash to fly back and forward, play as much golf as he likes and still has his pension income to live normally,

[markiii]

something we are considering, no-one to leave it to but each other

we don't need thecash persee but if we don't spend it then its wasted

so do we move location, no need to be where we currently live any more (but wouldn't want less space) and pocket teh cash

or equity release,

[covmutley]

markiii said:

something we are considering, no-one to leave it to but each other

we don't need thecash persee but if we don't spend it then its wasted

so do we move location, no need to be where we currently live any more (but wouldn't want less space) and pocket teh cash

or equity release,

I suppose in these circumstances, even a 'bad' deal might be preferable to no deal.

Perhaps the providers are chasing those happy to accept a bad deal?

[GasmanT]

Ducati996R said:

I did for a few minutes think about this product myself for the very reason you stated [Rach from accounts ]…but all the bad press and the thought of the rolled up interest put me off …but will watch this thread with curiosity

I have been tentatively looking at ER for a few years. We dont need any cash now, but may do so in ten years or so, God willing. The vast majority of contributors to discussions ae very negative. However, it seems that most comments are from folk that either have never actually looked at current rules, understnd the product or have heard "horror stories". These stories probably eminate from very early versions of ER , and in particuler those that had interest calculated onthe rise in value of the mortgaged home.

My particular concerns are:
The costs and practicalities of moving home at a later date (unlikely in our case, but one never knows)
When the last of me and my wife dies, (or we go into a nursing home) does the interest rate stay at the agreed level,or does it alter?

I am confident of my marriage security - but what happens if a couple seperate or divorce?

[GasmanT]

markiii said:

something we are considering, no-one to leave it to but each other

we don't need thecash persee but if we don't spend it then its wasted

so do we move location, no need to be where we currently live any more (but wouldn't want less space) and pocket teh cash

or equity release,

I suppose the big question is: do you like your current home and location? If so, why would you move, just to preserve an estate for which you have no family to enjoy? Obviously, you may have friends or a favourite charity - hopefully you have made a wiill?

If you have no particular love for yiur current set up, why not investigate moving, and then do ER. You are in a position to enquire with a lender that offers ER to set iit up with the actual move, after ensuring that there is flexibilty if you later decide to relocate again. I have a pair of friends whose parents have done exactly that.