Re: Equity
Originally Posted by
billclay
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Would you ever consider raising equity on your property, what are the pitfalls.
As someone else has said, it depends on your age now and whether releasing money this way is right for you Bill.
It's something we had considered some time ago but the thing that stopped us is the fact that, since we paid off our mortgage three years ago, our outgoings are just to run the house and feed & clothe ourselves.
We've also been on holiday three times in those three years and we are by no means rich.
It took us years of scrimping and saving to make additional payments towards our house to reduce the mortgage to a figure where our under-performing endowment would pay it
all off so we thought
why go through it all again when we have no real knowledge of what bank rates could rise to, (as Joe says), nor any possible life-changing things that could happen impacting on our income?
Considering that I was made redundant 4 times since we first moved into this house, (and my wife was made redundant once too!), we thought our best option was to reduce debts so that we knew what our outgoings would be as we already knew what our income was going to be.
We get by now on pension income and my part-time employment and it's not a lot but we would've been in serious trouble if we hadn't paid off the house.
Friends of ours did something like this and I don't know what kind of company they went with but
they paid a rent to stay and eventually that rent got to the point where they could not afford it with one partner fully retired and the other semi-retired.
We counselled them
against going ahead until they got some more info but they went ahead anyway!
They were however
extremely lucky because the Council answered their desperate plea and they got a council property to live in but in reality they put themselves in the position where they would have been homeless.
I know that with Equity Release Schemes this kind of thing is not the norm but they fell into the trap thinking the meagre initial rent would remain low but it did not!
You sound as if you want reassurance Bill and as others have already said, it's really up to the individual but I'd be very, very wary myself and I'd seriously consider all possibilities and how I'd manage with a number of different eventualities
first then decide. stevmk2