Equity release - non-standard construction

[Katrine]

Hi Bealybugs. I'll send you a PM (Private Message) but you probably won't be able to reply to me as you are a new member. You can post again to this thread though.

 

[Kevinl]

My husband is 77 and I am 71 - We have just applied for Equity Release and have been turned down by all the companies approached because our property is of a timber framed and SIPS construction - even though it is new build by a well-regarded German company. It is a very high value property and we were looking to borrow less than 20% of the valuation provided by two well known reputable estate agencies. Has anyone else had a similar experience?

I only know that most SIPS buildings are self build so insurance and equity release companies aren't usually too keen, however, if yours was built by a reputable company then I guess they just class it as none standard construction which is another thing they don't like.
K

 

[Shedrech]

hi @Bealybugs welcome to TP
and @Katrine
just in case you may have missed the 'Staying safe online' guidance in the Welcome forum, here's a link for you to check it out
New to Talking Point? Please read this...
maybe especially this

From time to time some members may feel they wish to be in touch with their TP friends outside of the forum, be that via email, telephone or in person.

Please be cautious when contacting other members directly or giving other members your personal contact details.

It’s really important to build up relationships - and confidence about those relationships - with other members, before exchanging any personal contact information with them

sorry, I have no experience of your situation, so am not any help there

 

[Katrine]

??? Confused by your message Shedrech. I just contacted Bealybugs to suggest 2 company names with which I had previously arranged an equity release mortgage for my mother.

 

[Shedrech]

hi @Katrine
as Bealybugs is a new member it seemed prudent to mention TP's awareness of online safety

 

[BenD]

My husband is 77 and I am 71 - We have just applied for Equity Release and have been turned down by all the companies approached because our property is of a timber framed and SIPS construction - even though it is new build by a well-regarded German company. It is a very high value property and we were looking to borrow less than 20% of the valuation provided by two well known reputable estate agencies. Has anyone else had a similar experience?

Hi Bealybugs
I wonder if you have made any progress. We are in a very similar situation - living in a high value, high quality engineered timber house. We have been turned down by all the main equity release lenders. The only possibility seems to be the Home Reversion option but this means selling part or all of the house to the provider under very onerous terms and conditions. I think we are victims of the 'tick box' application process which lumps contemporary timber engineered homes in with post-war prefabs. Our house it much better quality than any of the new build houses sprouting up everywhere these days. Wouldn't it be great if we could find the Equity Release version of the Ecology Building Society who lend against all sorts of non-traditionally constructed properties.

 

[Bazcumbers]

Hi Bealybugs. I'll send you a PM (Private Message) but you probably won't be able to reply to me as you are a new member. You can post again to this thread though.

Hi Katrina,

Could you please PM me the name of the company you dealt with? I would be grateful as I seem to be hitting a brick wall. thanks in advance.

 

[witts1973]

I thought the LA paid for the care if your savings fall below a certain level?

 

[Katrine]

My mother lived in her own home for 10 years with live-in carers before she died last year. We took out equity release on her property to allow her an extra 3-4 years there when her savings ran out. As it turned out, if we hadn't taken equity release her savings would just about have lasted until her death, but we couldn't have predicted that. It gave us peace of mind because we didn't have any money of our own with which to fund her care. It's all about personal circumstances. Equity release is not a cheap option. The interest rates are high.

 

[RobertHad]

My mother is trying to get equity release also, but is having problems because her property is steel framed/brick construction before 2000. Could I please get the names of those companies PM'd to me?

 

[RussellQ]

Hi Katrine

I found your post via Google and wondered if you could let me know who you used as a Broker to get your MIL's Equity Release ?

We are presently building a SIPS house for our retirement (I am 65 and wife 62) and although we have enough funds to just about complete, we will need a small amount after its built to pay off loans to enable the house to be completed. I have been seeing the usual horror stories about not getting equity release Mortgages for 'non standard' construction, this house is new with a concrete foundation but is clad in Larch so I am pre-empting the usual 'NO' form the usual Brokers so if you could pass on the one who helped you it would be appreciated.

We live in Aberdeenshire and although all houses are Timber Frame we still get discrimination about it being a Timber Frame !

 

[Katrine]

Hi Russell.

As you say, timber construction is standard now in many parts of Scotland and people can get mortgages to buy those houses. However, the larch cladding is probably the most problematic issue for you. Have you managed to get any company to provide insurance? When I got house insurance for my mum's property I found that the non-standard construction issue limited me to one company, LV. They took the view that the house was NOT non-standard. They said that the fact that the internal structure was made of timber didn't matter. It had a roof was made of concrete tiles and at least half the exterior walls were clad in concrete harling panels. The house was built off a concrete raft with block work dwarf walls on which the timber structure sat. I don't think your house would fulfil their definition of standard because the exterior isn't at least 50% brick or concrete.

To be honest, I don't recommend equity release except where there is no other source of funding. It's very expensive to set up. However, there's no harm in you asking a broker to quote for you. If you are in a position to pay off your loan then it might be suitable for your needs. I definitely wouldn't recommend getting a 'lifetime mortgage' equity release product where the interest just compounds. Since you are quite young, you could find yourself at the maximum borrowing limit after a few years, but still be needing your house to live in.

It is now quite some while since I organised the mortgage for my mum's house. I don't feel I should direct anyone to a particular broker. The market changes all the time. Google 'equity release calculator uk' and read around the subject. You will find some sites offering an instant online quote, but of course that presupposes standard construction. You have to phone up and discuss your specific requirements. Then they'll approach lenders on your behalf and obtain offers and terms to present to you. They'll also take a whacking great fee for the broker service in addition to all the other set up fees.

Good luck! I would be interested in hearing how it goes. Cheers, Katrine.

 

[RussellQ]

Hi Katrine
Thanks for that information, I have been in touch with a couple of local Financial Advisers and aim to sit down with them next year to see whats possible, or not !
Its annoying that if we dare to be different, Financial Institutions can't be bothered to look into it if it isn't 'standard' especially if the actual construction is better than the 'standard' mass produced homes.
As the kit is a 'structurally' designed Insulated Panel and we also have 2 Steel Portal Frames built into it, I can't see why they are so picky but I hope when I sit down with them I can explain all this. At the end of the day we may just have to take out personal loans and pay them off over time.
As for house Insurance, our previous Self Build was a pure Log House totally built out of Scandinavian Pine and we got insurance through Towergate so I am to speak to them again soon to see if they still provide that sort of insurance.
Will let you know how it goes.
thanks

 

[RussellQ]

Yeah, we are relying on it !!

 

[MaNaAk]

We are currently setting up an equity release arrangement for my mum. Her house is considered by most insurance companies to be of non-standard construction, although in this part of the world it is the standard for new houses (timber frame). Only one national insurance company will provide her with house insurance.

For equity release, you can but ask, and then you know where you stand. I thought it would be a problem, but it has not been so. It must depend also on the age and physical condition of the property, and whether known remedial works would bring such a property up to mortgageable standard.

We went through a national equity release mortgage broker. Contact was by phone, not by anyone coming to the house. This broker is independent, although they get a fee for selling you a product. It is a standard rate of fee so they have no reason to recommend one financial provider over another. They discuss your requirements and circumstances and recommend the best products for you. There is no fee to pay until you go ahead with a mortgage.

The product we are buying is called a Lifetime Drawdown Mortgage. We are borrowing £10K to open the account. Then after 12 months we can draw down sums as needed, to supplement my mum's pension income. We would be able to draw down a total sum of about 50% of the value of my mum's property. You yourselves might want more money sooner, or just a lump sum. The advisor will work with your specific requirements.

PM me if you would like the contact details for the equity release mortgage broker that we have used.

Dear Katrine,

I'm interested in this as well.

Happy New Year

MaNaAk

 

[Ellmoll]

Dear Katrine,

I'm interested in this as well.

Happy New Year

MaNaAk

1. Can you let me have details of your broker etc.
2. Many thanks

 

[Katrine]

It's been a while since we did this, and the market is ever changing, so I can't recommend one provider over another. If you Google equity release you will get many options.

 

[Jessconway]

We are currently setting up an equity release arrangement for my mum. Her house is considered by most insurance companies to be of non-standard construction, although in this part of the world it is the standard for new houses (timber frame). Only one national insurance company will provide her with house insurance.

For equity release, you can but ask, and then you know where you stand. I thought it would be a problem, but it has not been so. It must depend also on the age and physical condition of the property, and whether known remedial works would bring such a property up to mortgageable standard.

We went through a national equity release mortgage broker. Contact was by phone, not by anyone coming to the house. This broker is independent, although they get a fee for selling you a product. It is a standard rate of fee so they have no reason to recommend one financial provider over another. They discuss your requirements and circumstances and recommend the best products for you. There is no fee to pay until you go ahead with a mortgage.

The product we are buying is called a Lifetime Drawdown Mortgage. We are borrowing £10K to open the account. Then after 12 months we can draw down sums as needed, to supplement my mum's pension income. We would be able to draw down a total sum of about 50% of the value of my mum's property. You yourselves might want more money sooner, or just a lump sum. The advisor will work with your specific requirements.

PM me if you would like the contact details for the equity release mortgage broker that we have used.

Hi Katrine,

Really sorry I know this is an old post, but i’m in a similar position my mum is looking into equity release but as our house is non standard construction she is strugling to find a provider.

Could you let me know the contact details for the provider you used please

Thanks

 

[Mark_W]

Hi @Jessconway as this is an old thread I'd recommend starting a new one on this subject in the Legal and Financial issues forum. We don't allow people to post the names of legal or financial firms on the forum directly, but people can tell you how they went about finding them and potentially pm you a recommendation too.

Thanks