Hi everyone, in my job I give advice to people on releasing equity from their homes later in life. People usually use it for carrying out work on their home, giving money to their children etc but sometime people use it to buy a house as well so long as they can fund the rest of the purchase themselves. I’ve just come off the phone with someone who actually left me speechless at the end. Now this call went on around 15 minutes but the abridged version is below, sorry for formatting, mobile etc;
Hello, I’m 77 and looking to sell my home for £270,000 and clear my mortgage of £190,000. I want to buy a property for £200,000 and use equity release to help fund it.
Ok, so at your age you would be able to get at most around half of the value of the house before fees, so around £100,000. You’ll have £80,000 in equity from the sale of your home so that would leave you about £20,000 short of the purchase price before costs. Do you have any savings you can use to fund the difference?
How would you be able to fund the difference then?
I’ll use my spare income to save up
Ah ok, so how soon were you thinking of moving?
In around 3-4 months.
And how much would you say you can save each month?
So how are you going to save £20,000 in 4 months if you only have £200 per month spare income?
I don’t know, why does it matter?
(At his point I decided I couldn’t be bothered explaining about solicitors handling a house purchase requiring evidence of deposit funds to comply with money laundering regulations)
I need to know because if you can’t save up enough then you wouldn’t have enough money to buy the house.
I’d find a way.
I don’t know.
When the guy said he didn’t know how he was going to save the rest of the money I was actually lost for words and just sat in silence for around 30 seconds which is pretty much a lifetime on a phone call. I ended with a “Sorry we can’t help” and hung up. How can people be so clueless?