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11 hours ago, buccaneer66 said:

I think the boat ownership is probably more secure than the mobile home that I lived in for 25 years,

 

Lol, I mis-read that initially as "mobile phone" !

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18 hours ago, buccaneer66 said:

I'm having to sell Dad's house where I'm living in order to pay off the ridiculous amount of equity release interest.

Something that all the equity release adverts don't tell you. Equity release may fund a more comfortable old age if you have nobody to pass your wealth onto when you die, but if you plan to leave something to yours heirs it can make a real dent in the value of your estate. As the OP has found out.

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37 minutes ago, David Mack said:

Something that all the equity release adverts don't tell you. Equity release may fund a more comfortable old age if you have nobody to pass your wealth onto when you die, but if you plan to leave something to yours heirs it can make a real dent in the value of your estate. As the OP has found out.

 

I thought this is common knowledge?

 

You cant really expect them to lend you the money for all them years and it not cost.

 

We do seem fixated with leaving our 'wealth' to our heirs.

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7 minutes ago, The Happy Nomad said:

 

I thought this is common knowledge?

 

You cant really expect them to lend you the money for all them years and it not cost.

 

We do seem fixated with leaving our 'wealth' to our heirs.

Not me, I'm spending every penny - My eldest is already better off than I am!

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13 minutes ago, The Happy Nomad said:

I thought this is common knowledge?

 

You cant really expect them to lend you the money for all them years and it not cost.

 

I think the principle is known. What I suspect many don't understand is just how much debt can be accumulated as the interest rolls up on the cash sum released, especially if the borrower lives for a long time after the arrangement is set up.

 

And in the OP's case it's not just his inheritance that has gone - it's his home.

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4 minutes ago, David Mack said:

I think the principle is known. What I suspect many don't understand is just how much debt can be accumulated as the interest rolls up on the cash sum released, especially if the borrower lives for a long time after the arrangement is set up.

 

And in the OP's case it's not just his inheritance that has gone - it's his home.

 

I don't think if Dad knew this he would have done it, but the pay back is now 3 times what was paid for the house, and the interest is added daily not monthly.

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13 minutes ago, David Mack said:

 

I think the principle is known. What I suspect many don't understand is just how much debt can be accumulated as the interest rolls up on the cash sum released, especially if the borrower lives for a long time after the arrangement is set up.

 

And in the OP's case it's not just his inheritance that has gone - it's his home.

 

It certainly doesnt suit everybody thats for sure. 

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4 hours ago, The Happy Nomad said:

 

I thought this is common knowledge?

 

You cant really expect them to lend you the money for all them years and it not cost.

 
You'd think so, but I recently had to spell it out to someone who was thinking about it. They were surprised when I told them it was simply a lifetime mortgage (at a comparatively poor interest rate) that you don't make any repayments towards until you die with the interest piling up year after year. They were shocked when I told them their fairly modest £50,000 equity release would have their estate owing £170,000 after 25 years (assuming 5% interest rate). They didn't proceed and decided to downsize instead. 

The equity release market was unregulated for many years, where sales talk was king and facts were glossed over. I'm sure many wouldn't have gone ahead with it if they knew the facts, although it can have it's uses in certain circumstances.  

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1 minute ago, buccaneer66 said:

The flashy TV ads don't tell people what a ridiculous interest rate is charged

 

Very true, its often hidden in the small text that pops up at the bottom of the screen with an 'illustrative example'.

 

Downsizing would normally be the better option for most but for whatever reason not everybody wants to go down that route. Martin Lewis always says it really should be the last resort when you have explored all other options.

 

 

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5 hours ago, Slow and Steady said:

Not me, I'm spending every penny - My eldest is already better off than I am!

All our kids earn more than we ever did..................actualy thats not true, four out of the five do. Most of our working grandkids earn more than we did 😂 We have been told by the kids to take every penny out of the house we possibly can and blow it, or they will when we pop off lol.

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1 hour ago, The Happy Nomad said:

 

Very true, its often hidden in the small text that pops up at the bottom of the screen with an 'illustrative example'.

 

Downsizing would normally be the better option for most but for whatever reason not everybody wants to go down that route. Martin Lewis always says it really should be the last resort when you have explored all other options.

 

 

And that's another problem with equity release,  You live in a nice 3 bed house and as you get older realise that getting up the stairs to bed every night is not such a good idea, an nice little 1 bed bungalow or flat with a lift would be much better. Only now you don't own a house to sell to by that bungalow and you have no equity left

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2 hours ago, buccaneer66 said:

The flashy TV ads don't tell people what a ridiculous interest rate is charged

 

They certainly wouldn't have done when your Dad signed up. Even the name equity release is very misleading and should really be banned as it's nothing of the sort. Lifetime compound mortgage would be more suitable but doesn't sound as good.

 

22 minutes ago, ditchcrawler said:

And that's another problem with equity release,  You live in a nice 3 bed house and as you get older realise that getting up the stairs to bed every night is not such a good idea, an nice little 1 bed bungalow or flat with a lift would be much better. Only now you don't own a house to sell to by that bungalow and you have no equity left

  

Yes that is potentially a problem. Although in fact most equity release schemes do allow you to transfer it to another property, they would require you to repay a portion of the equity release balance if you downsized in value, so the lower value house would still be guaranteed to cover the outstanding balance at the end.  

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2 minutes ago, buccaneer66 said:

That it is

 

I don't think it is. These schemes are more accurately fraud as they mostly rely on the victim not understanding how The Miracle of Compound Interest works against them when they borrow rather than invest, or more accurately works against their heirs.

 

 

https://medium.com/everyday-finance/the-miracle-of-compound-interest-ee8d656cce07

 

There are people who use them and understand the damage they do to their estate, but I suspect they are few and far between. But if you want to extract and blow the value stored in your own house before you die, why not and how else can you do it?

 

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6 minutes ago, MtB said:

But if you want to extract and blow the value stored in your own house before you die, why not and how else can you do it?

 

You could always sell up and buy a narrowboat!!

Seriously though, other than downsizing it's a tricky one to answer. 'Equity release' will never allow you to extract anything like all the value of your house as they need the estate to cover the final compound balance. I imagine if you equity release at age 55, they wouldn't allow you to extract more than 25% of the value of your house.

 

The older you are I suppose the more they will allow you to release, but you want the money when you are still young enough to benefit fully from it.

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58 minutes ago, MtB said:

 

I don't think it is. These schemes are more accurately fraud as they mostly rely on the victim not understanding how The Miracle of Compound Interest works against them when they borrow rather than invest, or more accurately works against their heirs.

 

 

 

 

Fraud is simply robbery without the fisticuffs. 
 

 

Edited by Goliath
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12 minutes ago, Goliath said:

Fraud is simply robbery without the fisticuffs. 
 

 

So why call it robbery when it's fraud? 

 

 

robbery
 
rŏb′ə-rē

noun

  1. The act or an instance of unlawfully taking the property of another by the use of violence or intimidation.
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4 minutes ago, MtB said:

 

So why call it robbery when it's fraud? 

 

 

robbery
 
rŏb′ə-rē

noun

  1. The act or an instance of unlawfully taking the property of another by the use of violence or intimidation.

How about thieving bastards

 would that cover both robbers and fraudsters?

 

are you trying to escape on a technicality? 

Edited by Goliath
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3 minutes ago, Goliath said:

How about thieving bastards

 would that cover both robbers and fraudsters?

 

are you trying to escape on a technicality? 

 

Fraudulent bastards would be fine. Why try to shoehorn the wrong and misleading word into it when there is an exactly accurate word available in widespread use?

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2 minutes ago, MtB said:

 

Fraudulent bastards would be fine. Why try to shoehorn the wrong and misleading word into it when there is an exactly accurate word available in widespread use?

😴

Fraudulent bastards it is then, have it your way.


 

 

3 minutes ago, buccaneer66 said:

I think greedy money grabbing bastards does it quite nicely.

 

4 minutes ago, buccaneer66 said:

I think greedy money grabbing bastards does it quite nicely.

You’re a mod so I can’t give a greenie

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