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Equity Release

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Hi Hubbers,

I have had a family member (but not my immediate family!) ask me the best way they can release some equity form their home as they are approaching retirement and don't have a huge amount of cash. I think it may have been a hint for me to 'get involved', something I am not going to entertain!


Obviously as the 'property guy' in my family I was the obvious choice to turn to for some sound advice, problem is I have no idea about this side of property finance! 


Before I refer them to the MSE website and others I thought I may post here (a rare occasion!) in the hope that someone more informed than me has a nugget or two of advise that I can pass on.


Any advise, leads or recommendations gratefully received.......... 

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Hi Sam,


I am no financial advisor, however I am going through the process of releasing equity from my property.


I would say the main concern is that if the person is close to retirement by releasing equity from their home it will mean re-opening, or making the current mortgage larger. ensure this person is ok to pay the new mortgage cost and also in the event of getting poor  tenants that don't pay have they got an emergency fund to back this up.


The process seems pretty straight forward, have the house valued and understand that you will need 25% deposit for the new property plus costs, if the new mortgage repayments are reasonable, go for it!

the family member will however have to be able to cover both mortgages if the proverbial poo hits the fan and also the term allowed for the mortgage may be short pushing costs up.


P.S they are taking the equity out of the property for home improvements... backed up by a quote for work, I learnt the hard way when I was open with my mortgage provider that I wanted to buy a second property to BTL...

 they said no...


Good luck!




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Thanks for the reply. They are releasing funds from their main home, they don't have the funds to pay the new mortgage. It'll be a 'equity release' product specifically designed for retirees in their situation as oppose to releasing equity that we refer to as investors. Its a niche area of finance that I'm not familiar with. 



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