Stamp duty

[Mottie]

Pretty daft to stick it in the bank for a rainy day. When an overdraft, credit card of bank loan will do if you need it.

That’s what I said. They didn’t even need it for anything which was stupid.

 

[King Billy]

Pretty daft to stick it in the bank for a rainy day. When an overdraft, credit card of bank loan will do if you need it.

Some people are averse to borrowing.
But want the security of a reserve of cash in case of.......

 

[King Billy]

I’m only going on what I’ve been told. I think the equity release was about 25 years ago
Or more. They’d been in the house 40+ years. All I know is our friends are gutted about it. £30k all those years ago was a fair chunk of equity.

In an average saving account, after 25 years, £30k would return about £90k.
The sums stack up:
£600k after paying off the equity release + £90k gives £690k

I think some sums must have been lost in translation if they're moaning about the return.

 

[Mottie]

In an average saving account, after 25 years, £30k would return about £90k.
The sums stack up:
£600k after paying off the equity release + £90k gives £690k

I think some sums must have been lost in translation if they're moaning about the return.

Did I say they had put it in an interest paying account? Any person that takes out equity release for no reason has to be particularly stupid in the first place. Assuming you own your own home, would you take out equity release if you didn’t need the money?

 

[King Billy]

Universal credit to foreign citizens

It's limited to those meeting certain criteria, e.g. ILR, EU Settlement, Specific Visa holders such as The Ukraine, Hong Kong or Afghan resettlement schemes.

 

[motorbiking]

In an average saving account, after 25 years, £30k would return about £90k.
The sums stack up:
£600k after paying off the equity release + £90k gives £690k

I think some sums must have been lost in translation if they're moaning about the return.

You don’t appear to understand how these schemes are structured.

 

[Mottie]

In an average saving account, after 25 years, £30k would return about £90k.
The sums stack up:
£600k after paying off the equity release + £90k gives £690k

I think some sums must have been lost in translation if they're moaning about the return.

The equity release fee was £50k and that was just the penalty for selling the house before the end of the term as they had both not died. The original equity release of £30k was probably 50% of what the house was worth when they took it. That’s how I understand things.

 

[King Billy]

Did I say they had put it in an interest paying account? Any person that takes out equity release for no reason has to be particularly stupid in the first place. Assuming you own your own home, would you take out equity release if you didn’t need the money?

In their case, it made sense, if they were averse to borrowing and put it into an average Savings Account, it resulted in an absolute gain of £40k, at no risk.
I did say that I agree it's not a sensible approach, imo, but in their case it appears to have worked. And they had a lump sum in reserve just in case....
Fair play to them, and I don't understand why their children were moaning.

Unless some figures have been misquoted.

 

[Mottie]

Equity release companies do not just give you money and expect to get it back with standard interest added. They buy a share of your house. If they gave you 50% of what your house is worth now, they would expect 50% of what it sells for in the future when you die.

 

[motorbiking]

There is no scenario where it makes sense to bank an equity share and exit early, when you had no need for the funds.

It’s like burning your money to qualify for benefits.

 

[motorbiking]

Equity release companies do not just give you money and expect to get it back with standard interns added. They buty a share of your house. If they gave you 50% of what your house is worth now, they would expect 50% of what it sells for in the future when you die.

It’s worse. There is usually a multiplier applied.

Get 20% today for 40% equity.

 

[King Billy]

You don’t appear to understand how these schemes are structured.

Based on the figures quoted, it was obvious:

Our friends parents took out £30k equity release years ago and…….. stuck it in the bank! When the mum sold their house a year ago to move in with them, it sold for £650k. They had to pay £50k because she hadn’t died and only ended up walking away with £300k. What idiots!

And now I've highlighted the inaccuracies, the anecdote is being further elucidated to meet the desired result.

The equity release fee was £50k and that was just the penalty for selling the house before the end of the term as they had both not died. The original equity release of £30k was probably 50% of what the house was worth when they took it. That’s how I understand things.

Perhaps the omitted details could have been better explained at the outset.
A friend has taken some Equity Release in their home, but the amount payable to regain that equity is nearly double the original Equity Release value, not 50% of the current worth of the asset.
With a Lifetime Mortgage scheme, the accumulated interest on £30 over 25 years could result in £25k to £45k owing on the sale of the house.
That nearly aligns with £50k being paid on £30k Equity Release via a Lifetime Mortgage scheme.

 

[King Billy]

There is no scenario where it makes sense to bank an equity share and exit early, when you had no need for the funds.

It’s like burning your money to qualify for benefits.

Having a lump sum available just in case is a 'need'.
Some people are averse to borrowing.

 

[King Billy]

It’s worse. There is usually a multiplier applied.

Get 20% today for 40% equity.

A Lifetime Mortgage gives similar results to Equity Release without the negative aspects.

 

[motorbiking]

A Lifetime Mortgage gives similar results to Equity Release without the negative aspects.

Having a lump sum available just in case is a 'need'.
Some people are averse to borrowing.

Same problem