equity release. question (2 Viewers)

Minxy

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i found it out about 15 years ago.
Not sure it applies now, they've tightened up some of the rules I believe and are more 'active' in trying to get the money out of you now. It would be interesting to know if the 'reasons' etc you gave 15 years ago to prevent the authorities getting hold of the assets would still be valid today.
 

vwalan

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Not sure it applies now, they've tightened up some of the rules I believe and are more 'active' in trying to get the money out of you now. It would be interesting to know if the 'reasons' etc you gave 15 years ago to prevent the authorities getting hold of the assets would still be valid today.
try and get a booklet nhs continuing healthcare and nhs funded nursing care.
try citz advice.
 

vwalan

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or try a google for,,,, nhs continuing healthcare

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MC 55 FUN

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Not sure it applies now, they've tightened up some of the rules I believe and are more 'active' in trying to get the money out of you now. It would be interesting to know if the 'reasons' etc you gave 15 years ago to prevent the authorities getting hold of the assets would still be valid today.

I'll try & find out the actual facts from SWMBO, who deals with this on a current & regular basis, although I'm not sure if the law differs in Wales to that of England.

I do know that we would not expect other council taxpayers to pay for our care IF we could afford to pay for it ourselves.

Of course it's only fair & reasonable that those without adequate financial means should be supported by others - in this scenario that's what the welfare state is there for, having said that, care fees are astronomical & very little of the income is spent on salaries as most front line care workers are on the minimum wage & thoroughly deserve more i.m.o.
 

Minxy

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Can you do any of these equity release things with no income?
AFAIK yes but you would then just compound the income on the capital you've drawn out so the value left in the property wouldn't last long, assuming you have a property with a lot of value in it in the first place.

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Feb 22, 2008
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Can you do any of these equity release things with no income?

I have made enquiries and have enough info for an informed application should I require it.
Income is not part of the equation and equity funds can be obtained in different ways, a lump sum , stage payments and some lifetime mortgage deals allow for up to 10% to be paid back annually after the first year should you want to limit the total . It is also possible to move house and transfer the equity release to the new property subject to the lenders agreement.
Aviva and L&G are two major players .
 

Adbt

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My wife and I have no children , I'm 55 , wife 50 , mortgage paid off two yrs ago . House worth currently circa £400K . Come age 70 we are definitely looking at the equity release path . I don't intend to shuffle off this mortal coil asset rich .

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vwalan

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the real questions are
are you happy where you are?
is the house too big as you get older its a bit harder to maintain?
have you got parking for cars and m,home at home?
also a thought are you in a cheap vehicle /house insurance area.
do you want to travel around long periods .
there loads more questions really but the main one is are you happy with what you have done so far?
if you are then possibly equity release could be ideal for you .
if you have kids and want to leave them something then it might not be .
 
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far better to down size to a cheaper area . specially one that is in a cheap car insurance area etc .
its like the mortgage in the first place . paying it off as fast as you could was the way. then the mortgage companies put clauses in to stop you . carefull reading of small print is the key.

Vwalan, that's more or less what I did. I was lucky enough to get a flexmortgage while I was self-employed, so I could pay off chunks of the outstanding loan as and when I had a bit of spare cash, without penalty.

Equity release probably only suits a small minority because it is basically a very expensive kind of mortgage where the interest rolls up and is compounded at a scary speed. There have been stories of people losing their homes when the total amount owed grew beyond a certain point relative to the value of the house and the mortgage company decided to call it in. If you are considering this kind of finance, you definitely ought to familiarise yourself with the small print even if you are getting independent advice. Downsizing is the other option. That can genuinely release equity instead of creating a different kind of financial millstone.
 

Minxy

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Vwalan, that's more or less what I did. I was lucky enough to get a flexmortgage while I was self-employed, so I could pay off chunks of the outstanding loan as and when I had a bit of spare cash, without penalty.

Equity release probably only suits a small minority because it is basically a very expensive kind of mortgage where the interest rolls up and is compounded at a scary speed. There have been stories of people losing their homes when the total amount owed grew beyond a certain point relative to the value of the house and the mortgage company decided to call it in. If you are considering this kind of finance, you definitely ought to familiarise yourself with the small print even if you are getting independent advice. Downsizing is the other option. That can genuinely release equity instead of creating a different kind of financial millstone.
Another option is to move to a cheaper area where you get more 'house' for your money so you can get similar to what you have and still have cash in hand at the end.

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vwalan

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Another option is to move to a cheaper area where you get more 'house' for your money so you can get similar to what you have and still have cash in hand at the end.
you could but given many want a m,home and use it going smaller and moving to a cheaper area gives even more time and cash to spend .
i must admit my place here is a bit too big for me but have got loads of garden to hoard scrap etc .
after all never know when it might go up in value .
but think hard what ever you decide might be hard to alter once you have done it .
unfortunately many things need to be thought about years before you get older.
or perhaps i should have said old . ha ha .
sorting things out in mid life can make getting older much easier.
 
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Asked my financial guy about this a few years ago, 'bunch of bandits' was his reply.
 

snowdrop18

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Surely if a person has assets that they can no longer use but they need residential care they should sell those assets to fund it. Why should anyone else have to pay i.e. the rest of us?

Also presumably you can get a higher level of care if you are self funded.

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vwalan

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self funded or primary care trust funded its the same .
the payment of funding is there for lots with assets but if you need continuing care with medical or mental problems the primary care trust pay or should . thats the rules .
just going into care for many is chargeable to the individual.
 
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kalamitty

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to get back to the original post, at the moment i've no intention of going into a care home, i looked into equity release a couple of years ago, the stories of people having to sell their property is because they took equity before the industry was regulated. i took early retirement at 59, when i was offered a property in wales, there are only two house's where we are, my wife is 8 years older, i live on my savings and a small inheritance from my parents, we have a bigger garden and drive and it is a peaceful life, i bought a new car so that should last a while, we only have one daughter and she has a good financial income. so far no one has admitted to using equity release to fund their lifestyle. i bought a nice caravan to use as an extra room as we get friends asking if they can stay, all agree we are in a lovely place.
 

Kool Kroozer

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I have always found that buying your own property can be a bit of a red herring sometimes, You work hard all your life, pay your taxes and always try to do the right thing in life - and if for instance i had to go into care and my assets were sold to pay for my keep (all sounds fair so far) until all my assets are gone then normally the local council pay some and the rest is made up from whoever or whatever is available.
The other side of the coin is Colin (made up name) who is the local piss head who has never worked a day in his life spends whatever money he gets from the state on fags and beer ends up in a care home too has no assets to sell but his care is paid for all the same - is this fair ?

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2657

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to get back to the original post, at the moment i've no intention of going into a care home, i looked into equity release a couple of years ago, the stories of people having to sell their property is because they took equity before the industry was regulated. i took early retirement at 59, when i was offered a property in wales, there are only two house's where we are, my wife is 8 years older, i live on my savings and a small inheritance from my parents, we have a bigger garden and drive and it is a peaceful life, i bought a new car so that should last a while, we only have one daughter and she has a good financial income. so far no one has admitted to using equity release to fund their lifestyle. i bought a nice caravan to use as an extra room as we get friends asking if they can stay, all agree we are in a lovely place.

It sounds to me that some form of equity release would enable you to live as you wish but as others have said be very careful with interest rates and have any agreements you will be asked to sign checked by a specialist/lawyer.

The only form of equity release available to us was to sell up and live semi full time in a van, this was 8 years ago and we have adapted things slightly and will do so again when the time is right.

Sorry to go off thread again regarding care homes etc but I would like to make a few comments from personal involvement with the care of my Father and MIL who both had dementia.

There is a very unclear grey area between funding for the costs of social care and nursing or medical care, dementia unfortunately is one condition that is open to different interpretation on this issue.

I presume that @vwalan fought and won his case on the basis of getting the care his parents needed reclassified as 'nursing care' instead of 'social care'. Many authorities refuse to treat dementia as in need of nursing care until the very final stages, this was the case with both my Father and MIL.

Nursing care is funded wholly by the NHS, social care is only funded by the local authority on a sliding scale depending on assets which is in my opinion reasonable, the problems and disputes arise when attempting to differentiate between the two.

There is difference between a Care Home and a Nursing Home though some fulfill both functions.
 

CWH

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to get back to the original post, at the moment i've no intention of going into a care home, i looked into equity release a couple of years ago, the stories of people having to sell their property is because they took equity before the industry was regulated. i took early retirement at 59, when i was offered a property in wales, there are only two house's where we are, my wife is 8 years older, i live on my savings and a small inheritance from my parents, we have a bigger garden and drive and it is a peaceful life, i bought a new car so that should last a while, we only have one daughter and she has a good financial income. so far no one has admitted to using equity release to fund their lifestyle. i bought a nice caravan to use as an extra room as we get friends asking if they can stay, all agree we are in a lovely place.
You say your daughter has "a good financial income". How good? (I'm not asking you to answer that!) If it's good enough, could she/ would she want to purchase a share in your house? This would release some capital to you, she could perhaps increase her share over time, it secures the property against seizure by ANYBODY for the rest of your retirement and for her (eventual) inheritance.

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Feb 22, 2008
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You say your daughter has "a good financial income". How good? (I'm not asking you to answer that!) If it's good enough, could she/ would she want to purchase a share in your house? This would release some capital to you, she could perhaps increase her share over time, it secures the property against seizure by ANYBODY for the rest of your retirement and for her (eventual) inheritance.

That is where a Lifetime Mortgage could be an advantage, take the equity realease to spend on your last years but let your family pay the interest, or more back to ensure much is remaining in the end.
Some plans allow this.
 

CWH

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That is where a Lifetime Mortgage could be an advantage, take the equity realease to spend on your last years but let your family pay the interest, or more back to ensure much is remaining in the end.
Some plans allow this.
OK, hadn't come across that one before. Just as long as you/ your family aren't giving more to the mortgage company than you need to!
eg you could "sell" to your daughter a 49% share, to be paid in installments - this gives you both a high degree of security, and gives yourself an income, with nobody paying interest to anybody. (Solicitor's fee to set it up of course.)
I suppose among other things it depends on whether you're wanting a regular income or a lump sum, and whether you want the whole value of the house.
 
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We looked into ER a few years ago when I retired but the offers did not release much of the worth of our property.we felt the companies offering this service were a money grabbing lot and that it's a big rip off. We decided to stay put and when we need any money can either sell up or down size.

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Feb 22, 2008
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OK, hadn't come across that one before. Just as long as you/ your family aren't giving more to the mortgage company than you need to!
eg you could "sell" to your daughter a 49% share, to be paid in installments - this gives you both a high degree of security, and gives yourself an income, with nobody paying interest to anybody. (Solicitor's fee to set it up of course.)
I suppose among other things it depends on whether you're wanting a regular income or a lump sum, and whether you want the whole value of the house.

They won't give the whole value of the property, depending on deals around 40% ish max.
After the first year up to 10% pa of the loan value can be paid with prior agreement which would more than cover interest accrued and bearing in mind increase in property value , could well end up with a nominal mortgage/debt to be settled by the benefactor of the will.
 

Adbt

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Equity £255K
And then equity release on retirement property , that looks like a winner for the future !
 

Abacist

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Surely if a person has assets that they can no longer use but they need residential care they should sell those assets to fund it. Why should anyone else have to pay i.e. the rest of us?

Also presumably you can get a higher level of care if you are self funded.

Sorry to say but this sort of attitude makes me pig sick!

Its no different to people living in council houses all their lives and boozing and smoking their lives away and we have to pick up the tab for them when they want care.

Compare that to the prudent person who scrimped and bought their own house, to whom you refer above, and then it gets taken away from them to pay for their care. Its hardly fair is it!

I would never do it but it pays to be a worthless spendthrift in life as the state ends up picking up the tab which means you and me!

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Sorry to say but this sort of attitude makes me pig sick!

Its no different to people living in council houses all their lives and boozing and smoking their lives away and we have to pick up the tab for them when they want care.

Compare that to the prudent person who scrimped and bought their own house, to whom you refer above, and then it gets taken away from them to pay for their care. Its hardly fair is it!

would never do it but it pays to be a worthless spendthrift in life as the state ends up picking up the tab which means you and me!
@Abacist I don't take your comments about council house tenants boozing and smoking all their lives as a valid and fair comment my parents lived in a council house all their lives and brought up a family they could not afford to buy their own house and certainly did not booze and smoke or expect you to pick up the tab for them, please do not tar everyone with the same brush.
It's very offensive!!
 
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crabman

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many rules change without us being fully aware of the consequences, my advice after being in the export business for over 30 years is never make a decision of this importance with out the advice of a learned solicitor, who has knowledge of such matters, it worth the price of a consultation to know what is right or wrong in these complicated issues,
 
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PeteH

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There have been stories of people losing their homes when the total amount owed grew beyond a certain point relative to the value of the house and the mortgage company decided to call it in.

NO Longer legal. Both or one surviving partner can stay in the property until the last survivor is deceased (or goes into care), even if the property goes into negative Equity. Only at that point does the lender have the ability to ask a judge for "possession". The Mortgage/Insurers now take out their insurance against such an eventuality, which is inevitable reflected in marginally increased rates. (of course!)

I have a folder full of documentation which clearly states this dated Circa 2012, When we looked into it ourselves. In the end we downsized to a Bungalow in our Village.

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