Equity Release - Advice for my parents

merlinsear1

Hi Folks,

Can anyone please guide me through the maze of equity release. My dad has asked my to find out which type/company is best but it is a minefield. Obviously he wants the best deal to release approx half of the houses worth, which they own outright, if poss this would be paid back at the death of either him or my mum as they don't have much income. My dad is 75 and mum is 68. I have no idea how to advise him or who to ask for impartial free advice, it needs to be quite soon so they can continue to live their twilight years in comfort.

Many thanks in advance.

M

ManAtHome

Should be a good starting point http://www.ageconcern.org.uk/AgeConcern/information_794.htm

Dunno if they'll get 50% - most of the ads I've seen top out at 25%. Main problem is that interest racks up around 6% (or more..) so the debt can double every 12 years or so - providers like to ensure there will be enough left when they collect..

Ian_W

Hi merlin & welcome,
There is a fact sheet from Age Concern - HERE and a link to the same topic on the Help the Aged website - HERE.

The schemes basically fall into 2 catagories:
Lifetime Mortgages - where a sum is lent against the value of the home and the interest roles up to be repayed after the death of both parents [or long term care of the longest surviving].
Reversionary Schemes - where a % of the house is bought and when sold in above circs the same % is owned to the lender.

The former should inc no negative equity guarantee and is certainly regulated by the FSA, the latter type wasn't [it's not a loan as such] but may have become so recently. There is a good article on chanel 4 website HERE
about the schemes and the co's that operate them have an umberella rganisation called SHIP with a website - HERE. The schemes have had some critisism lately from Which? but that relates to older schemes which the co's involved say have now been addressed.

Plenty to get your teeth into there. BoL to your parents.