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Equity Release - any advices????

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  • Equity Release - any advices????

    Hi all,

    Would really appreciate ANY advice from anyone whose used one of these plans as things have come to a head in the last day and would appreciate anyones thoughts before I start looking into this.

    Here's the situation.......

    My brother (a builder) is struggling financially both personally but more significantly with his business. He's telling me he's got loads of work on but simply cannot get the finance from the banks to be able to take jobs on. So he's contacted me tonight to ask to get some money from Mum by way of relaeasing equity from her house.

    Mum is widowed, age 67, and owns her house outright which is worth circa £250,000. My brother wants to see if he can get equity release for £20k for him, £20k for me and £20k for mum whose down to her last £3k of savings.

    So, he's looking at equity release to get some money to tie us all over which would help us all at the moment.

    Does anyone have advice on this, has anyone looked into or taken out such a plan, anyone to avoid, anyone that can be recommended???

    Thanks in advance for any advices,

    sharon

  • #2
    Re: Equity Release - any advices????

    My Mum has done this recently.

    You must make sure you use a reputable company and preferably make your final choice from the different schemes available after taking independent financial advice. This is very important as there are an awful lot of bad schemes and an even greater amount of dodgy advice to choose from - you need to be absolutely certain before you sign anything.

    My Mum's property had been on the market for over a year - she wants to downsize and will still sell, but only when she can secure a decent offer and subsequently a sale.

    With her chosen scheme the interest owed is compounded every year on the amount she took from the equity, so it follows that if you don't pay the money back (or sell the property) you run the risk of not being able to raise enough money to buy another property should you wish to move. However, with this particular scheme, the debt will never become greater than the value of the property.

    Given the amount you wish to take from your Mum's equity in her property this will mean, if you decide on a similar scheme and your Mum is quite happy to carry on living in the property until she dies, she can do just that, but after her death the property will belong to the company you choose for the equity release.

    Equally, if she chooses to sell after an extended period, there will not be a substantial amount with which to purchase a new property or to leave to her family in inheritance.

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    • #3
      Re: Equity Release - any advices????

      we have found out my father in law took out equit release, the loan was for £30,000 and in four years it jumped to £96,000 so be very careful.

      Comment


      • #4
        Re: Equity Release - any advices????

        Do either you or your mum want or need £20k?

        There are an awful lot of horror stories out there about these schemes.

        Comment

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