Equity release from house

F

Flick

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Hi could someone explain to me how you go about releasing equity from a house. Just to give you some background.

My antie, who is 65, paid her mortgage off some 10 yrs ago. She does not have any dependants so wishes to release some money to enjoy life and do some travelling. Does anyone know what way she would go about it while still keeping her home?

thanks in advance
 
I presume that you are referring to equity release options for the elderly such as RRL/Residential Reversions Limited, SHIP/Shared Home Investment Plan and BoI Lifeloans (?)? There may be others but these are the main ones as far as I know. Search for previous threads mentioning these. Is there no other option, such as family buying out part of her share in the property or trading down that might be more cost effective since some of these equity release products involve high charges or losing large chunks of the property over time for not so much money?
 
I think the term "equity release" should be banned.

The various schemes around described as this are all about borrowing money, secured on an asset, usually your home.

You will pay handsomely for this.

I'd agree that a better option, which is in fact real equity release, would be to sell the house and move somewhere smaller.
 
ang1170 said:
I think the term "equity release" should be banned.

The various schemes around described as this are all about borrowing money, secured on an asset, usually your home.
Click to expand...
But that's what releasing equity means! I don't agree that he term should be banned. Obviously such products should be advertised/marketed responsibly and consumers have a duty to inform themselves of the pros and cons before entering into a contract.
 
To my mind, the only way to "release equity" (i.e. release the value) is to sell.

Borrowing, which is what these products are all about, in not selling.

That's why I think the term is misleading.
 
Hi Clubman, What exactly is involved in buying a part share in her home. I was considering buying the house for a discounted price which she did agree to but i could not afford it. What exactly is involved in buying a share of the property ?

thanks for the advise
 
If you buy part of the house from her, you would presumably be raising a mortgage. As she still will own the other part, she will need to be jointly-named on the mortgage. Not a problem if the mortgage is assessed purely on your income. But the lender must have the right to repossess the house from under your aunt if you default on the loan repayments. Not ideal.

For alternatives, see this post and links from it.
 
Disclosure Notice - I work as mortgage broker

the financial regulator did a survey and issued a warning recently on the SHIP and Residential Reversion Products.

The SBPost article linked below covers the issues quite comprehensively

[broken link removed]

However if 'equity release' is the only option then i believe (and i think the Regulator agreed) that Seniors Money were the best option amongst those product providers as they will allow you to repay the loan at any time without any penalty

www.seniorsmoney.ie

Some Product Details

http://www.bestadvice.ie/images/seniorsmoney1.pdf
 
If you want to learn more about equity release, the Regulator did a guide about it.....points out all the pitfalls (I got a copy for my Dad as they were thinking about it but since changed their minds).
 
See here (IFSRA don't make it easy to link to specific pages of their webite unfortunately :().
The Financial Regulator today (6 February 2007) warned homeowners to look at all their options and get independent advice before using an equity release scheme to release money from their home. The warning comes as the Financial Regulator publishes a [broken link removed], which explains the different types of equity release products available and the main issues to consider. Lifetime mortgages and home reversion schemes are designed for homeowners over 60 years of age and give people the option of getting a lump sum or regular income without having to move out of their home.
Click to expand...
[broken link removed]
 
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