Equity Release??

We once looked at it just for the sake of knowledge and came to the conclusion that it was a bad deal financially for one's heirs, but a reasonable way to deal with a shortage of cash for the homeowner.

I've just seen an advert for Age Concern Gifted Housing (www.ageconcern.org.uk/gifted-housing). This may not be appropriate for you, but others might find it interesting. Basically from what I can see you make the house over to Age Concern and in return they arrange and pay for most of the maintenance, provide support in the home, pay the council tax, water rates and insurance, and have some involvement in paying for care if that becomes necessary. Worth a look I guess.

We had a look at it and talked with our daughter that all we don't anticipate it if we needed to draw down something it would affect her inheritance - she said 'don't be silly its your house you must use it as you need to and don't talk to me about dying'!!!

Alie I think you need to talk to a financial adviser. These schemes are generally very expensive and normally the last resort. I think a lot depends upon how old you are and your state of health. If you expect to live for many years it is not usually a good option.

Could you consider downsizing? You are in a house, could you buy a flat?

I read somewhere about a scheme to help older people with house repairs, could you ask Age UK if they know anything about that?

Best of luck and I hope someone on here can give you good advice.

Nonnie I think you are right about the financial adviser.

I do not want to lose my house. I have a daughter who doesn't want this house, but I would like to leave her enough for a house deposit.

Every time I google 'lifetime mortgage' I find schemes with monthly repayments!!!

Yes you do need specialist advice, and a point to take into consideration is that it may cut you off from any benefits you may be entitled to either now or later.

Yes - but how do I find out about that?

AllieOxon there is some info here and at the bottom of the page a comprehensive guide that you can download..

www.ageuk.org.uk/money-matters/income-and-tax/equity-release/what-is-equity-release/

Teetime - excellent answer that daughter!

No personal experience but from what I've read they're not a good idea and as others have said, a last resort.

I'm sure many of us have been tempted by the idea of 'equity release' but it really is just a mortgage against your property, to which you are not making any re-payments so the interest accrues at an alarming rate.

Better to down-price, in my opinion.

tanith thanks.
I will read this carefully....back later!

Sorry, meant to say the debt accrues at an alarming rate (not interest).

The 'younger' you are i.e. the amount of time you have left to live.....sounds a bit stark but it needs considering.....the worse the deal is.
A relative who has had 12 years worth of income from his home has recently died.....after costs etc. have been paid there will be almost nothing left from a house worth a good £200,000.00. So you need to be very careful.

Each person has their own specific situation and ideas.
I would do anything to avoid an equity release plan.
The goal of such a company is to make money - thus who is it that loses out?
Our kids also say.... spend your money... don't talk about dying. (This when I told them that everything they would need was in the box under the bed... and who the original Will is with)

Personally, if I ever have to think on these lines I would try down sizing. House to smaller house, small house to a flat.... My friend did this recently and released quite a lot of money, enough to remove the burden of bills and house repairs, and allow for an occasional treat.

From the limited amount I have read about these schemes, they appear generally thought to be considered not a good idea in most people's cases.

I believe there are two types of scheme. Someone I know entered into what I think is called a drawdown scheme where money is drawn down as and when and in the amounts needed. Therefore interest only accrues on what has been drawn down. The other scheme, I think, is where a large amount of money is made available all at once and therefore interest accrues on that larger amount right from the start. As has already been mentioned, the interest owing soon mounts up.

Personally speaking, if it were possible, I would downsize or rent out a room.

Alie I do not know where you live but could renting a room be an option? Depending on your location, you may be able to do it for eg 3-4 days a week to allow somebody living a distance away to return to his or her own family.

Yes, a friend of mine rents out a room to a lady who just needs it Monday-Friday. She is away from the house from about 8 a.m. to 7 p.m. and at the weekend she goes to stay with her husband in another part of the country.

So did my next door neighbour. I have thought about it but not at all sure I want to live with anyone! If I could find the right person I would.

I do want to stay here. I've already done the downsize, release money bit! Only this house is actually bigger, I just liked it.

Re the equity release, the situation is much worse than it thought.
Still looking.

I am in the process of getting information about equity release - my only asset is my little house and I feel frustrated that having bought it 13 months ago, there are things I would like to do to 'make it my own' but no money to call on. I would also like the occasional holiday and know that other big expenses inevitably crop up from time to time. I have learned that if you go for equity release with no interest payments, the debt doubles in 12 years. If you go for the interest option (which really needs to be paid for by my 2 children in order to 'protect' their inheritance), they would 'save' about £10k over the same period. I still haven't decided what I'm going to do ........

If you are choosing downsizing, do not forget park homes. They are usually significantly cheaper than bricks and mortar. Modern ones are well insulated and a good size and the majority of your neighbours, if not all, will also be retired.

Recent legislation offers owners a lot of protection. People I knew who lived in them were very happy there.

Nansypansy We have looked into both drawdown and getting a large sum of money from our dear little home. We've had a face to face with Key solutions and a telephone consultation from Age Concern. Be aware if you take the larger amount offered depending on your age (I'm only 65) the interest rate today is at just over 6% over 22 yrs will result in an obscene amount of accrued interest to be paid over.
The advantage is you get a large lump sum.
If you take an initial smaller sum then return back for another sum the interest today is much much less.
Everything depends on your own individual needs. Would you care if you had no equity left in your house. Who would mind this and would it matter. Our family want us to make our own decision - what's best for us.
Think of the initial price you paid for your house.
Think if you had been living in a private or LA house you'll still have to go on paying when retired and there's no equity.
Much to think about
Has anyone out there got a positive experience of this situation cause I would love to hear from you.

Financial sdvisers can also charge a mind blowing sum of money, up to £2000 so please be careful there.

Your "lovely" neighbours may well put off anybody buying your house.