EquityReleaseForum.org
open discussion on equity release
my wife and I have lived in our current house for over 20 years now and despite the recent fall in its value we think its worth lots more than we paid for it. We're lucky enough to have no mortgage. If we released some equity now (we're both in our early 70s) can we spend it on just living better and will there be anything left when we're gone?
Equity Release may involve a lifetime mortgage or home reversion plan. To understand the features and risks ask for a personalised illustration.
The answer to the first question about whether you can spend it on 'just living better' is yes! You can spend it on what you like. But don't forget you've borrowed it and so it'll need to be paid back. This happens when you have both passed away, or gone into long term care. The house is sold and the outstanding debt is paid back.
As for whether there will be anything left, well that depends on how much you borrow, for how long and what happens to house prices. Generally you won't be able to borrow too much, so you would expect there to be some equity left, but it's not guaranteed. What is guaranteed is, that if the value of your property is less than the outstanding debt - then the lender makes up the difference.
If you're considering this as an option I would recommend an IFA. They can look at your whole financial situation and assess whether Equity Release is suitable for you or not. I would also recommend an adviser who charges a fee for that advice rather than charge a fee once the money has been advanced to you. If they charge 'on completion', they only get paid if you take the product - so are they really going to suggest you don't do it?
I would also suggest that you consider it very carefully - and take your time to decide.
Dermot Brannigan is an Independent Financial Adviser and fully qualified to advise on Equity Release. As an IFA I assess the suitability of Equity Release first, rather than just recommend a product
Dear Users,
Please note that the comments by deeb above reflect the opinions of the contributor and not those of www.equityreleaseforum.org.
Whilst we respect that contributors are entitled to express their views on such matters, we would not support the implication that specialist equity release advisors who charge a fee on completion would be in any way inclined to give inappropriate advice. All those who wish to advise professionally on equity release must be suitably qualified and regulated by the Financial Services Authority. Each such individual is obliged to treat their customers fairly, which would include advising them against equity release when it is not their best option.
For more information visit the website of the trade body, SAFER (Specialist Advisers for Equity Release), which details in its code of practice that all members should provide a free initial consultation to help customers to understand more about equity release without having to incur any up-front cost. The link to this site can be found within the 'Useful links' section.
Kind regards
Victoria Joint
Victoria Joint
Administration Manager
EquityReleaseForum.org