Is equity release a bad idea?

[Christine Plum]

Our mortgage is fully paid. We live in a very desirable area overlooking the sea. Our house is our only capitol. We have no one to leave our house to and would like to release some equity without being ripped off. What are our options?

 

[Purple]

CCPC info here.
The short answer is it depends on the terms of the loan.

 

[TomEdison]

We have no one to leave our house to

What will become of your house when The Time Comes? The costs of any equity release scheme you enter into will, in effect, be born by whoever gets the house after your death, so if the scheme is a needlessly expensive one it's them, more than you, who is ripped off.

 

[Leper]

Hi Christine, I wouldn’t touch equity release with a forty foot barge pole. Neither would I think about an Afterlife loan. But, I think you need to provide more information and you probably will get more advice if you complete a Money Makeover on this forum.

 

[Brendan Burgess]

, I wouldn’t touch equity release with a forty foot barge pole.

And I would never employ a Corkman!

@Leper

You should not make statements like this without some sort of arguments backing them up.

 

[Brendan Burgess]

What are our options?

They are fully set out with the arguments for and against in this thread.

Key Post - Spry Finance Lifetime Loans

I find the Spry Finance website complicated so this is my summary of it. If you are at least 60, you can take out a Lifetime Loan from Spry Finance. There are no other providers in the Irish market which is a pity. You do not have to make any repayments, they will roll up the interest. The...

www.askaboutmoney.com

 

[ClubMan]

Hi Christine, I wouldn’t touch equity release with a forty foot barge pole.

It could be a very apt solution in this or many other situations. A couple who want/need cash and don't need to leave their fully owned property to anybody when they die. A lifetime loan could be a perfectly appropriate way to release equity depending on the terms of such a loan.

you probably will get more advice if you complete a Money Makeover on this forum.

I agree. A lot of questions get asked here on Askaboutmoney that really need a more comprehensive view of the questioners' overall financial and personal situations to answer properly.

 

[Dublin Walker]

I did this last year. Found the process very good. Used some of the funds to clear an existing IO mortgage. TBH has some initial concerns, and I talked to a financial advisor and they walked me through it. Delighted with outcome. Obviously everyone's situation is different, but I was certainly happy the option existed as the thoughts of being forced to leave my home is something I didn't want.

 

[ClubMan]

I talked to a financial advisor

What kind of financial advisor?

 

[Dublin Walker]

I talked to an advisor in Irish Mortgage Corporation, I had seen a section on their website. They walked me through all refinance options. Also discussed with an experienced accountant of large firm (family friend), they laid it all out.

 

[Persia]

I talked to an advisor in Irish Mortgage Corporation, I had seen a section on their website. They walked me through all refinance options.

They sold me an endowment mortgage in the late 1990s, all the rage then.

A more financially literate version of myself would have laughed the advisor out of the room.

 

[Allpartied]

If it's a very desirable area, you could release capital by downsizing. This is, usually, the most effective way to realise the , possibly huge, capital availability of your asset. If not, then Spry, is the only option, as there is limited availability of this product in Ireland.
With or without dependents, it might make sense, as this is your asset, which you have fully paid for. If you need money, then access it. Don't live in penury, just so some distant cousin can get themselves a windfall, sometime in the distant future.