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Releasing equity on your home

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chickenstrip
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PostPosted: 16:00 - 30 Jul 2017    Post subject: Releasing equity on your home Reply with quote

My situation seems to be a bit different from most, who have family to leave their assets to when they die. But what if you own your own home outright, and have no one to leave it to? Can this be used to your advantage while you're still alive? Is there some kind of deal where you can raise capital on your home, and agree to the lender taking possession of your property when you kick the bucket, assuming your spending doesn't go over the value of the property?

Can't find anything online that addresses this situation, so I fully expect to be told I'm an idiot Smile
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Itchy
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PostPosted: 16:09 - 30 Jul 2017    Post subject: Reply with quote

If you die with nobody eligible to inherit then it becomes bona vacantia effectively it goes to the crown/government.

You can equity release and then when you die the crown administrator will use your estate to pay off your debts or obligations on your estate.

The crown gets the rest. IIRC it's better than selling because you can't be turfed out into you're actually dead. There are of course fat fees.
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chickenstrip
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PostPosted: 16:32 - 30 Jul 2017    Post subject: Reply with quote

Itchy wrote:
There are of course fat fees.


But of course!
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arry
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PostPosted: 17:04 - 30 Jul 2017    Post subject: Reply with quote

Look into an offset mortgage. It can be used somewhat the same way, within reason.
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P.
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PostPosted: 17:05 - 30 Jul 2017    Post subject: Reply with quote

Leave to BCF.
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chickenstrip
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PostPosted: 17:26 - 30 Jul 2017    Post subject: Reply with quote

Paddy. wrote:
Leave to BCF.


Send monies naow, and it's done deal Very Happy
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Tracey Suntan-King
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PostPosted: 19:01 - 30 Jul 2017    Post subject: Reply with quote

It's a drastic step at your age though, meaning you're not old enough.

I know you're short of cash right now but if you go down the ER route it's a one off deal and your only asset is no longer your asset.

Have you considered a short term lodger to assist cash flow short term?
Busking?
Becoming a rentboy?
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Last edited by Tracey Suntan-King on 19:17 - 30 Jul 2017; edited 1 time in total
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M.C
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PostPosted: 19:07 - 30 Jul 2017    Post subject: Reply with quote

Why don't you downsize?
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Polarbear
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PostPosted: 21:13 - 30 Jul 2017    Post subject: Reply with quote

I don't know much about it but I would have to be very desperate to do that.

I worked my socks off to pay for my house and now I own it the thought of not owning it in any way at my age would worry the shit out of me.

If you decide to go down that route, get some serious advice. I can see so many pitfalls behind the 'You will have plenty of money in your retirement' adverts you see.
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grr666
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PostPosted: 21:53 - 30 Jul 2017    Post subject: Reply with quote

https://www.moneyadviceservice.org.uk/en/articles/equity-release

Specifically - https://www.moneyadviceservice.org.uk/en/articles/equity-release#home-reversion

Hope this is of use, but it's not a decision to take lightly. I'd examine all other avenues including selling goes on my arse first.
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Pigeon
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PostPosted: 21:56 - 30 Jul 2017    Post subject: Reply with quote

A friend of my parents did just this. 25% of his current house value was given in cash on the understanding that the finance company get the money back (+ the vig) when he dies.

I'll ask them about the company detail and post it back in case of use.
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Polarbear
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PostPosted: 22:19 - 30 Jul 2017    Post subject: Reply with quote

Pigeon wrote:
A friend of my parents did just this. 25% of his current house value was given in cash on the understanding that the finance company get the money back (+ the vig) when he dies.

I'll ask them about the company detail and post it back in case of use.


How much do the blood suckers charge for the pleasure of giving you a quarter of the value of your house, the other 3/4?

And is it dependent on who dies first?
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arry
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PostPosted: 12:49 - 02 Aug 2017    Post subject: Reply with quote

mpd72 wrote:
A lady across the road from me was in a bit of financial difficulty and did something similar. They gave her about £20K cash, which paid her debts off and left her with a few thousand for herself. They redid the bathroom/kitchen/heating and built a convervatory. I'm led to believe the mortgage was paid off years ago when her husband died, before I moved here in the late 90's.

For this, they own her house in it's entirety on her death.

Her daughter who is in her 40's still lives with her and is fecked when her mum dies. A sad affair.


Eh? I've never seen that.

I was executor for my nan's estate and she'd had an equity release loan against her house. The amount released was something like £25k in 2004 and at her death in 2016 the debt had risen to £43k - it's effectively a reverse mortgage.

When she died the lender suspended interest payments and allowed 9 months for the house to be sold or the debt to be repaid. House was sold, and the conveyancing solicitor paid the lender off and released the balance of funds to me as executor.

It wasn't a particularly pretty interest rate - or I didn't think so at the time (but was probably comparable to a mortgage interest rate at the time she took it out, but that could have been renegotiated on a new deal with the base rate fell in 2008) but the process / concept was pretty straight forward.
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chickenstrip
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PostPosted: 13:55 - 02 Aug 2017    Post subject: Reply with quote

Difference being chaps, I really don't give a damn what happens to any of my stuff when I kick the bucket. No one to leave anything to, so no one to lose out. So I'd want to raise as near to the outright value of my house as I could. But if the fees were truly ridiculous, or if the capital I could raise was capped well below that value, there wouldn't be much point. For 20 or 30k, I wouldn't bother. The house has an approximate current value of about £100k.
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Ste
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PostPosted: 14:08 - 02 Aug 2017    Post subject: Reply with quote

You could leave your house to charity to be used either as a halfway house or as a place for drug rehab.

You've got to leave your stuff to somebody otherwise the government will get it all. Sick
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chickenstrip
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PostPosted: 14:42 - 02 Aug 2017    Post subject: Reply with quote

Ste wrote:
You could leave your house to charity to be used either as a halfway house or as a place for drug rehab.

You've got to leave your stuff to somebody otherwise the government will get it all. Sick



*Meaningful silence*
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M.C
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PostPosted: 15:28 - 02 Aug 2017    Post subject: Reply with quote

M.C wrote:
Why don't you downsize?

Or sell up and rent... I assume rental prices are a lot lower up there?
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Wobbling Dog
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PostPosted: 16:08 - 02 Aug 2017    Post subject: Reply with quote

s'funny that if you end up in a care home these vulture companies get to keep the house whereas gifting it to family could have you up shit creek with the local authority for 'deprivation of assets'
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M.C
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PostPosted: 00:28 - 05 Aug 2017    Post subject: Reply with quote

mpd72 wrote:
M.C wrote:

Or sell up and rent... I assume rental prices are a lot lower up there?


Depends how long you think you'll live. Renting becomes more expensive than buying in my area after 25 or so years.

It wouldn't make sense in the south east, it might up chickenstrip's way, but yes it depends on how long he plans on living Wink
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Omega
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PostPosted: 08:20 - 05 Aug 2017    Post subject: Reply with quote

Can't you just get a normal mortgage? That'll give you cash to spend/invest now if that's what you're after. Sell up and rent if not.

My auntie and uncle bought my grandparents house a while ago and rent it back to them. Keeps the money in the family while giving them access to all of the tied up cash.
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Wobbling Dog
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PostPosted: 10:58 - 05 Aug 2017    Post subject: Reply with quote

Omega wrote:


My auntie and uncle bought my grandparents house a while ago and rent it back to them. Keeps the money in the family while giving them access to all of the tied up cash.


get on your knees and pray they survive the 7 year cut off
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thx1138
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PostPosted: 11:12 - 05 Aug 2017    Post subject: Reply with quote

sell and rent
sell and downsize
sell and move somewhere cheaper

spend money
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M.C
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PostPosted: 19:03 - 05 Aug 2017    Post subject: Reply with quote

Omega wrote:
Can't you just get a normal mortgage? That'll give you cash to spend/invest now if that's what you're after. Sell up and rent if not.

I think he wants to keep living the life of Riley Very Happy

Wobbling Dog wrote:
Omega wrote:


My auntie and uncle bought my grandparents house a while ago and rent it back to them. Keeps the money in the family while giving them access to all of the tied up cash.


get on your knees and pray they survive the 7 year cut off

Indeed.
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