Home reversion/equity release?

madrina93

Hi,

I've been having a browse through the internet for a family member about some sort of scheme she heard about where you can sell your house but still live in it until you die and you get the cash lump sum of what your house is worth. Problem is, I can't find any banks, firms offering this in Ireland or Dublin. Does anyone have any idea where I'd find a firm or bank offering this kind of deal. To me, it sounds a little too good to be true...

phormium

I don't think there is anyone offering that in Ireland anymore, there were a couple of companies back before the tiger died, maybe even further back than that but have not heard of anywhere in years doing it.

It was a bit too good to be true! There are plenty of downsides to it but on the other hand it was a relatively good solution for some people, not too many though!

coylemj

If I recall correctly, there was two variations on this...

1. You sold a fixed % of the house for cash, then the lender simply waited for you to die or go into permanent nursing care at which point the house had to be sold and they got their piece of the action. They were effectively buying a share of your house as a long term investment.

For the convenience of getting a lump sum and being able to remain in your house, you typically had to accept a valuation on your house that was less than it's actual market value e.g. your house was worth 500K but you sold 25% of it for 100K.

2. You took an amount of money as a loan with the (unencumbered) house as security. The lender then applied interest annually which (if you lived long enough) potentially meant that your equity in the house diminished to zero. You would never be kicked out but as in the previous scheme, as soon as you died or went into permanent nursing care, the house had to be sold and the loan paid off, potentially leaving your heirs with zero.

This scheme usually involved a pretty horrendous interest rate which compensated the lender for taking on the risk that your equity would fall to zero following which you managed to live for another 20 years!

As happened before the last crash, if anyone is offering either of these schemes, you will hear about it on radio or TV ads.

beechwood55

Google 'Bank of Ireland Lifetime Loans'. They were getting a lot of very bad publicity last year.