Equity release. Would you do it?

Equity release and Lifetime Mortgages are the same thing. They call it a lifetime Mortgage to try and get away from the stigma associated with equity release. I have one with Legal and general. If I continue to pay the interest the amount outstanding will remain the same but I can reduce it by over paying or increase it by underpaying or not paying at all. It's what Equity release has evolved into. The advice to see a solicitor is sound because like any Mortgage you need a solicitor to complete and act for you. The info is all out there, if you are interested do your research and see for yourself. Personally I would never get one for any of the reasons in the ad's that's for sure. If I could have found any lender willing to lend me what I needed I would have taken a Mortgage but no one would even though my income would cover it, My age ruled me out.

Static caravans dont take homes from anyone Varian.

They are incredibly bad value for money though.

If you like that kinda holiday get yourself a regular booking in a top range static: you'll still never spend as much as the owners do!

I would never want a second home of any sort. Apart from the fact we like visiting different places, I find it quite enough bother looking after one home, let alone two - and there aren't even enough homes for folk who just need a first home.

Heheh notanan2 - you get me! Thank you.

I have no desire to add to the list of DIY projects or maintenance worries. It's hard enough keeping on top of one house, never mind two and OH does not seek out projects involving tools or expense either!

I know lots of happy campers - people with static caravans - who love getting away regularly. Are they really happy?

Yes I think so but the "happy campers " I know love tinkering with their caravans/campers as much if not more than they love actually getting away in it! They are always doing little bits of decorating/DIY on it when its in the drive for fun, like a giant craft project. So I do think they are "happy campers" but they enjoy the alterations and repairs just as much as the get-aways!

Same must go for bricks and mortar holiday homes, for people who love DIY/gardening/tinkering then its a benefit not a chore of having a holiday home.

But if your idea of a fun break is putting up your feet and zoning out with a book, it is NOT FOR YOU!

I think I am just a dreamer. I have always liked the idea of 'escaping' and getting away from the rat race to somewhere small and peaceful. I dismiss all the difficult bits like maintenance - and even the necessary bed making and cooking and washing up!

I have to take Reality Pills regularly!

I know lots of happy campers - people with static caravans - who love getting away regularly. Are they really happy? You have all given sensible advice, and warnings. Thank you. I shall update OH, who imagines we could live on takeaways and beer from the local pub, which is within staggering distance of the bolt hole, naturally!

A second home or camper or caravan must be a labour of love.

You must love tinkering with it & doing the maintenance as a hobby in itself. Otherwise it'll just be an Albatross round your neck.

We have owned second homes both as an escape for ourselves and as a letting business. There always seemed to be some problem or another that required our attention and we found we weren't using them enough so we no longer have them.

You can escape with a moments notice now! Last minute bookings are usually available.

If you are "escaping" to "your" holiday home you wont be bringing a spare book, you'll be bringing tins of paint and gardening kit etc

I spent a week in someones family members holiday home a while back, the family member who owned it was up a ladder or under a sink the whole time we were there!

To be honest even a motor home requires quite a big financial outlay. We looked at the idea but decided we could have a lot of holidays for the cost of a motor home.

It might be worth looking at life time mortgages.
I have an aunt who did that, and it was as she expected, gave her the amount she expected, and was problem free, apparently.

Thank you all for your honest answers. I really appreciate your thoughts and you have given me lots to think about.

It's an overwhelming "NO" really, isn't it and to be honest, I am not surprised!

Yes, kittylester, I think you are right about two options but both equity release and the lifetime mortgage would mean financial complications for us, which we really don't need or want.

Eglantine, I know what you mean about snapping up an affordable house as a second home. In this day and age and given the lack of housing stock, it does sound selfish.

Our friends never mention the council tax, or costs of maintenance and utility bills of course, but they do have to be paid.

I have always wanted a motor home but OH is not so keen as he doesn't like driving much these days because of roads and traffic jams. We'd have to be setting off for somewhere regularly to justify its existence.

I am sure static caravans come with problems and costs too but I still love the idea of a bolt hole we can escape to at a moment's notice with just a good book and clean underwear!

There is equity release and there are life time mortgages. I think they are different. As far as I'm aware, a lifetime mortgage releases some of the equity from your property which you pay interest on whilst still retaining ownership but equity release gives ownership of your property in exchange for an income or lump sum. Possibly!

Sorry everyone. I didn't mean Gransnetters don't know what they are talking about. By someone impartial, I think I meant a Solicitor or an Accountant perhaps.
A good idea Melanie

Day6
Equity Release is probably the worse decision you will ever make. Your home is probably the best investment you have ever made, it will increase in value, which is why Equity Release companies are so keen to get you hooked.
By far the best solution is to downsize your house buy the cottage you dream of either locally or by the sea.

Probably the only circumstance you should use Equity Release is, if you have no children and you want to use the cash to travel.

Do check your wills, it should say
"I leave everything to my spouse on the first death"
On the second death it goes to the children
The rules changed in 2005 and can make a big difference .

Sorry missed typed! It’s a bad financial move!

Wouldn’t have considered

I wouldn’t do it. We have a H/H owned outright, as is our home. The H/H does require upkeep, utilities and full council tax.
We would have considered raising a mortgage on our home a bad financial move.
You could rent a holiday house 6 months of the year in many coastal regions for a fraction of owning a H/H.

It's not something I would consider. I agree with Melanie, best to get advice from someone impartial before proceeding. From what I have heard from others, it's not quite as good an option as it first appears.
As has been said by an other poster, you will also have the upkeep of a second home, which can be financially draining.
Good luck with whatever option you choose.

Sorry everyone. I didn't mean Gransnetters don't know what they are talking about. By someone impartial, I think I meant a Solicitor or an Accountant perhaps.

I think you should think very carefully before doing anything like this. Also, I think it would be wise to consult someone impartial who knows what they're talking about. Not quite sure who that might be.

I've just read through what I've written and think I sound very "stick in the mud" but I am a very cautious person.

As you age, do you really want the upkeep of a second property?

I wish you well.

I did it because when I got divorced I was ordered to pay my ex 25% of the value of the house. I didn't want to move and I'd paid the mortgage off before I met him. So basically I now have a mortgage on my house as I'm paying the interest which is £7 grand a year. If you don't plan on paying the interest your house will not be worth much as the Interest racks up quite quickly. If you do pay the interest you will still owe the amount borrowed even if you live for another 30 years. In that respect it's no different from an interest only mortgage. If you want to pay more than the current interest you can I believe you can over pay by about a third. So the amount you owe would go down but that's quite a large sum to find each year, especially if your struggling to get by. Your own house has to be worth quite a bit to raise enough to buy another property. I'm with legal and general and I think they were very open and honest throughout. They'll happily send you the information booklet if you ask.

If you’re thinking of it as a saving on holiday costs you have to set that against maintenance, council tax etc.
As a future asset it’s unlikely to offset the roll up of interest on the equity loan. If you chose to pay the interest that’s another monthly expense.

Having two houses to look after would be my nightmare! When I go away I do not want to be cooking and cleaning and shopping for food. But each to their own.

However, I’m all for enjoying life today so if you really think it will enhance your life, go for it!

A lodge or a caravan please. Don’t deprive a local couple of a home they could afford.

posted in a rush, hope it makes sense.

I wouldn't do it myself Day6 although it may be right for you.

The small cottage not too far away could become a liability although sometimes I wish we had done that years ago before prices shot up. You have to think of the upkeep, keeping it warm in winter to prevent damp, at a time of year when the family may not want to use it.

We thought of downsizing and perhaps buying a caravan or chalet on a particular site and set that against the cost of holidays and it didn't seem that cost-effective. Added to which we always want to go somewhere different for holidays, as do the family.

I wouldn't risk my main property - I'd rather downsize and use any surplus money on holidays etc.

Horses for courses though.