BigD

I am looking for any advice or information regarding Equity Release in Spain.
I would n't mind peoples views & experiences regarding the schemes that are around.(there are so many?)
It seems a lot of the information I have managed to research is very frightening, surely it can't be all bad?
There must be someone who would be kind enough to share their experiences
good or bad.
Any information greatly appreciated.
Kind Regards :scared:

Beachcomber

The best advice is not to touch any financial advisor in Spain with a barge pole. If you have no other alternative check here first:

http://www.costa-action.co.uk/ :scared:

However advantageous the terms of any equity release package may appear you will lose out in the long term.

Solarwhizz

There is an very long discussion on this here.

http://www.idealspain.com/messageboard.htm



The thing to remember is that generally your property will be undervalued by the provider, you will probably not get more than about 50% of the undervalued value, and if you default for any reason you will be building up a huge mountain of interest debt on the remainder of your property (you can guarantee it will be in the small print somewhere). The only time I beleive equity release is viable is if you are about 90years old (generally the older you are the higher % will be available for release), you have a terminal illness, no relatives and your life expectancy is short, and you are gonna use all the cash for wine women and song on a First class round the world trip!! Cos you cant take it with you.

To me the scheme is irresponsible and shameful pretty much like the same industry did to us in the 80's with endowment policies and conning people to come out of Company pension schemes into private pension schemes.

Insurance salesmen and Financial advisors come just below estate agents in the world ratings

Steve Laird

Equity release in Spain is very different (and in my opinion rather better) to that commonly used in the UK. Generally, it consists of an interest-only mortgage linked to an investment. The latter is designed to cover the cost of the interest and to provide a little extra 'income' as well. You can take up to 20% of the value of the property as cash but please bear in mind that this will mean that the investment, being smaller, will have to work harder to pay the interest on the loan. Many loans are multi-currency, so you can take advantage of lower interest rates (e.g. Swiss Franc rates are currently @ 1.5% cheaper than Euro).

The amount of the loan will reduce the value of the property for Spanish Inheritance tax (IHT) purposes and the investment should escape Spanish IHT if the beneficiaries (your children?) do not live in Spain when you die.

Contrary to popular belief, there are some decent advisers in Spain although I accept that they are few and far between. If you stick to firms that are regulated either in Spain (by the DGS or CNMV) or the UK (Financial Services Authority) then you should be advised to a high standard.