Is equity release a scam?
Discussion
eldar said:
Very much this. Some of the advertising doesn't make the risks (and fees) at all clear.
My ma-in-law (age 82) was advised by her brother to get involved in one of these "scams". Hasn't a scooby about it other than how much they gave her. Doesn't understand why it costs her nothing, how compounding interest works, or what's outstanding either now or in the future. Bonkers. Like something out of 'Better Call Saul'. Of course muggins will bail her out of it, but for goodness sake! These 'scams' need done under the supervision of family members and trusted solicitors. In fact I'd say if the clowncatcher organising it doesn't insist on family involvement and legal oversight then it's definitely shady.
Otoh in some circumstances where there aren't any options then properly executed by certain specialists they certainly have a useful place.
drainbrain said:
My ma-in-law (age 82) was advised by her brother to get involved in one of these "scams". Hasn't a scooby about it other than how much they gave her. Doesn't understand why it costs her nothing, how compounding interest works, or what's outstanding either now or in the future. Bonkers. Like something out of 'Better Call Saul'.
Of course muggins will bail her out of it, but for goodness sake! These 'scams' need done under the supervision of family members and trusted solicitors. In fact I'd say if the clowncatcher organising it doesn't insist on family involvement and legal oversight then it's definitely shady.
Otoh in some circumstances where there aren't any options then properly executed by certain specialists they certainly have a place.
Which, in my experience, they are. Just waiting for evidence from the contrary from elder and Gran Fondo etc, but I'm not holding my breath.Of course muggins will bail her out of it, but for goodness sake! These 'scams' need done under the supervision of family members and trusted solicitors. In fact I'd say if the clowncatcher organising it doesn't insist on family involvement and legal oversight then it's definitely shady.
Otoh in some circumstances where there aren't any options then properly executed by certain specialists they certainly have a place.
See here:
http://www.equityreleasecouncil.com/standards/
Edited by sidicks on Monday 8th January 20:09
Equity release is just a loan, a loan against the current value of your house. It’s just restructuring your current mortgage either by making it longer or upping the payments. There will be interest to pay on that “equity release”. Think of it as a loan... no scam. It’s not free money!
55palfers said:
If one has no children and the house is paid for, equity release would be a great way to fund a wonderful lifestyle (tax-free?) in one's autumn years.
There's other things to think of. My father-in-Law did it, then shortly after MIL took ill and died. They had a house with a largish and complicated (multi-terrace) garden and it had really been her thing. He didn't want to stay in the house but after selling it and paying back the loan there wasn't enough to buy much else. Rest of the family had to wade in to help - without that he'd have been stuck in the house.1. No it is not a scam
2. All fees and costs should be confirmed in writing at least 3 times at various stages . The amount to be owed at various times in the future is also confirmed in writing.
3. No you cannot take equity Release on a property that is not your main residence.
4. It is not right for everybody but if you do not want to move and are not concerned about leaving a maximum inheritance, then it can prove an attractive option
2. All fees and costs should be confirmed in writing at least 3 times at various stages . The amount to be owed at various times in the future is also confirmed in writing.
3. No you cannot take equity Release on a property that is not your main residence.
4. It is not right for everybody but if you do not want to move and are not concerned about leaving a maximum inheritance, then it can prove an attractive option
Clockwork Cupcake said:
How is taking out a secured loan against your house a scam? It's just additional borrowing against your mortgage (if you have one) or taking out a mortgage (if you don't), surely? Or am I missing something here?
I don't think you can take out an equity release product if there is still an outstanding mortgage on the property (unless the equity release is to pay off the other mortgage).Gassing Station | Finance | Top of Page | What's New | My Stuff