equity release. question (1 Viewer)

Aug 10, 2012
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The problem that I see with putting equity into a motorcaravan is that it is a diminishing asset.
If your wife survives you do you want to ensure that she still has adequate funds on which to live a reasonable life?
You get into the whole old age dilemma when deciding on pensions and other financial issues as to how long you will live? How long will your wife or partner live? Which one of you goes first?
All matters on which you have to try and attempt some sort of judgement.
Our van is now 13 years old. I would love a newer one but coming up 80 next birthday would I be justified in getting into loan situations?
So I guess that we will chug along with our much welded van plus our little Panda car.
 
Apr 17, 2016
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In the paper today,
A women had taken out an equity release 15 years ago with a major bank for 20k to renovate her kitchen
She died aged 80 and the daughter was sorting out the estate and found out that the loan had gone up to 115k!!
The property was worth 220k
This was a major high street bank that no doubt forgot to tell her what the cost would be.

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MC 55 FUN

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In the paper today,
A women had taken out an equity release 15 years ago with a major bank for 20k to renovate her kitchen
She died aged 80 and the daughter was sorting out the estate and found out that the loan had gone up to 115k!!
The property was worth 220k
This was a major high street bank that no doubt forgot to tell her what the cost would be.

Compounded interest @ approx' 5% is the major drawback with equity release as you highlight, a lifetime mortgage can allow repayments which often offset all or most of the interest accruing, so the initial debt doesn't escalate dramatically, if at all.
 
D

deleted-member02

Deleted User
£100k equity release - compound interest is horrendous.
The illustration below ignores any fees and is based on 5%apr (approx. current equity release rate)
Real figures may be slightly lower as you're unlikely to take the full £100k in yr1 (but fees added at the beginning may make it worse :eek:)
compound.jpg
 

MC 55 FUN

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Feb 18, 2016
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£100k equity release - compound interest is horrendous.
The illustration below ignores any fees and is based on 5%apr (approx. current equity release rate)
Real figures may be slightly lower as you're unlikely to take the full £100k in yr1 (but fees added at the beginning may make it worse :eek:)
View attachment 113405

Your figures illustrate my point in my post above yours perfectly - thank you. (y)

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GeriatricWanderer

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I rather lean towards the idea of selling our mortgage free house and renting in a cheaper district. The only question is - when to do it so you can spend enough to enjoy the rest of your lives yet keep enough to pay the rent.
Our kids earn a darned sight more than we ever did so no plans to leave them anything. I'd like to spend my last £ on the way to the cemetery.
 
Feb 22, 2008
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If the above illustration were carried out with interest being paid annually e.g. a lifetime mortgage , the final loan amount would be much less and with property value increasing a sizeable legacy would still be left .

This is horses for courses and if you want cash to spend and have no beneficiaries , do it , better than leaving it all to the state.
 

movan

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if you have medical needs or a mental problem ,like dementia they cant make you pay.
plus you can transfer the property to the kids etc before you go in a home .
use the rules to suit you not them .


Sorry but that is wrong ...in England anyway. Both my mum and dad had both alzheimers and cancer ... the council took everything to pay for care .. pension, private pensions, widow's pension ... anf finally house to pay for the amount over and above what they had taken and charge.

They allowed £20 per week to pay for toiletries, hairdresser, chiropodist, clothes and in my case food that mum needed as she could not eat what they gave her.

Not read all the thread so apologise if duplicating.

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vwalan

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Sep 23, 2008
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when paying your original mortgage if you only pay a few quid extra each year it also mounts up very quickly and cuts the mortgage time .
but always make sure there isnt a penalty for doing it . just ten twenty quid a month makes incredible benefit.
 

The Lobster

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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.

Like Scotland, where you can wild camp, property is cheap, and you can agree with your local council to defer payment of care costs until after your death and your house is sold ("deferred payment agreements"). The way things are going, it also might let you stay in the EU, should you wish, and hence roam free on the Continent a little easier. Only issue is the weather...
 

vwalan

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Sorry but that is wrong ...in England anyway. Both my mum and dad had both alzheimers and cancer ... the council took everything to pay for care .. pension, private pensions, widow's pension ... anf finally house to pay for the amount over and above what they had taken and charge.

They allowed £20 per week to pay for toiletries, hairdresser, chiropodist, clothes and in my case food that mum needed as she could not eat what they gave her.

Not read all the thread so apologise if duplicating.
yes they do try and take it . you have to fight them with the rules .
yes they can take the pension and give them a sort of pocket money.
but if you dont fight the primary care trusts they take every thing .

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movan

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not if you have mental or medical problems . the reason for going into care .
there really arent anytime limmits on care and transfer but if its a year or 18 months you win .
unfortunately many just dont fight . thety give in and dont check out the rules .

I fought and made myself ill. There is care and nursing care ... alzheimers is just care.
 

vwalan

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I fought and made myself ill. There is care and nursing care ... alzheimers is just care.
all i can say is my brother and i fought our local authority and won .
i found they lied and tried their best to not accept the outcome but in the end they lost.
 

vwalan

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all i can say is my brother and i fought our local authority and won .
i found they lied and tried their best to not accept the outcome but in the end they lost.
it is very tiring and can be very upsetting to keep going to meetings and they do try to make you seem dishonest . but it is possible if you are capable . its hard getting independent specialists to do reports and some do charge alot . cost us about 3 grand . but it was worth it in the end .
but i can imagine it does get some that far down in the dumps they give in . i know a few round here .
but it can be worth it .

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Jan 8, 2013
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Our kids earn a darned sight more than we ever did so no plans to leave them anything. I'd like to spend my last £ on the way to the cemetery

Get the kids or a rich relative to buy your house or a percentage of it.
If you only sell only a percentage then there is no obligation to charge you rent - so can still live rent free.
Down sizing would be the easiest.
Is there any pensioners flats available in the area. Could you apply for one of those and simply sell up and spend like crazy before you need a care home.
 
Jun 30, 2010
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Don't get me wrong
Money is LOANED WITH INTEREST

You are losing from the minute you sign

To move to a smaller prem later
You will have to pay that debt plus whatever costs prevail

You need to be desperate I'm thinking







@tofo says it all
there is always a catch! Yeh you get the dosh to buy big,
BUT there are cheaper m/hs older but just as good, and if truth is known of a far better build quality!

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kalamitty

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thanks for all the replys, at the moment my daughter is not in a position to purchase even a part of my property, just split from the a####le she married, now happy and moving on with life, if she stayed with him i would have without hesitation sold to a company. i dont need the money to live on and i certainly wont be moving or downsizing, i only moved here last year and loving the peace and tranquility, i purchased a caravan to use as a spare bedroom for visitors so will end up touring with that when i want to go away if ever, i just wondered if anyone had actually used the equity to help purchase a new van, who cares what property is worth when they are gone. there are no pockets in shrouds, but wheres theres a will theres a relative waiting.
 

cruiser

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Still no one has come back and said they have done this. I was going to try this. But having second thoughts.
 

injebreck99

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Still no one has come back and said they have done this. I was going to try this. But having second thoughts.

Well Cruiser , we have done it, and it has made a big difference to our lives, in a positive way, it suited our personal requirements. We have done ours with Aviva.
We had access to 25% of our property value, but we have not taken it all, we have no dependants, any remaining family we have do not need our money after we are gone, we can live here until we both pass on,
Then the property gets sold and Aviva have their dues, but we can never owe them any more than the property is worth.
Any money left over after the property is sold and Aviva is paid has been bequeathed to the Norfolk Wildlife Trust, we are long time members.
The interest rates are high, and the amount owing does increase as time passes, but we don't care what the property is worth after we go, because we won't be here.

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Mar 23, 2012
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As long as you know what you are getting into and it sounds like you do why not!! enjoy what the money brings because at the end of the day is only numbers until its spent.
 
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Robert Clark

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Well Cruiser , we have done it, and it has made a big difference to our lives, in a positive way, it suited our personal requirements. We have done ours with Aviva.
We had access to 25% of our property value, but we have not taken it all, we have no dependants, any remaining family we have do not need our money after we are gone, we can live here until we both pass on,
Then the property gets sold and Aviva have their dues, but we can never owe them any more than the property is worth.
Any money left over after the property is sold and Aviva is paid has been bequeathed to the Norfolk Wildlife Trust, we are long time members.
The interest rates are high, and the amount owing does increase as time passes, but we don't care what the property is worth after we go, because we won't be here.
Who pays for repairs to the building in the meantime?
 

cruiser

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Thanks for that @injebreck99 . We do have two sons . They say cash in and spend. But my better halve wants to leave them some. So I think we will have to wait a bit longer.
 

CWH

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Thanks for that @injebreck99 . We do have two sons . They say cash in and spend. But my better halve wants to leave them some. So I think we will have to wait a bit longer.
So cash in and set up a couple of trusts for them, and spend the rest ;)(y):whistle:
 

cruiser

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I think we will wait for a couple of years. And then buy a small flat. And then spend the rest.
 

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