Equity Release

nimagraven

Hi all,

I'm not sure if this is the correct forum to post to, so please bare with me (and my apologies if it isn't!)

My mum and dad have been looking into maybe using equity release to consolidate all their debts..

They have a few concerns about it though.

Is there anywhere I can get good information about equity release?

Their concerns range from interest on money borrowed (is this escalating until they die?) to other things involved in it (if the house plummets in value, do me and my brother suddenly owe a lot of money because we can't pay back the release?)

Does this make sense?

If it doesn't, I'll grab one of them so they can tell me what to write .

Thanks,

Sarah.

koexelek

Equity release should really only be used as a last resort.

If you can't find a local whole of market broker able to advise in this area, look at this site....

http://www.ship-ltd.org/

getmore4less

Debts die with people you can't inherit them.

The bigest problem with consolodation is it does not tackle the root cause, overspending in the first place.

Tackle the root cause and look for other solutions first.

yelf

Most equity release providers are part of SHIP -which have a no negative equity guarantee: this means you never owe more than the house.

They can service the interst or let it roll up. The interest rate will be fixed forever and so wont move, but the amount owing will compound up (unless thye service it).

getmore4less: what a stupid comment. If they have an issue now then they have an issue now, your comment is totally usless and condescending
.

OP: seek an IFA.

opinions4u

yelf wrote: »

getmore4less: what a stupid comment. If they have an issue now then they have an issue now, your comment is totally usless and condescending

I disagree.

Consolidating debts and continuing to overspend is a flawed strategy.

Dealing with overspending, making genuine lifestyle changes, consolidating and never borrowing another penny is a sensible way forwards.

Mrs_Bumble

I think it really depends on how much debt we are talking about?

If it is a relatively small amount that could be addressed by sitting down and working out payment plan and organising etc then consolidating probably isn't a good idea but if it is a large amount that is causing stress and anxiety then looking at other options is probably not a bad idea?

I do do agree that the cause does need to be looked at to ensure that the problem doesn't occur again and making sure that the lessons have been learnt.

yelf

opinions4u wrote: »

I disagree.

Consolidating debts and continuing to overspend is a flawed strategy.

Dealing with overspending, making genuine lifestyle changes, consolidating and never borrowing another penny is a sensible way forwards.

Rubbish! If someonme has overspent as in need of debt consolidation, then action needs taking. Yes curbing FUTURE spending is needed - but you aint got a time machine have ya??

Mrs_Bumble

Rubbish! If someonme has overspent as in need of debt consolidation, then action needs taking. Yes curbing FUTURE spending is needed - but you aint got a time machine have ya??

Making unsecured debt into secured debt shouldn't be the first step. Everything has to be looked at carefully, all options considered and not just assuming that consolidating will make it all better.

opinions4u

yelf wrote: »

Rubbish! If someonme has overspent as in need of debt consolidation, then action needs taking. Yes curbing FUTURE spending is needed - but you aint got a time machine have ya??

Let's say the figure owed is, for arguments sake, £50k.

Is it better to consolidate now and then build up another £20k in debt on top of the £50k?

Or is it better to get to the route cause, change attitudes and behaviour, then consolidate?

Dealing with the cause is absolutely not "rubbish".

nimagraven

Hey all,

The figure is roughly £50K..

They have loans which total around £1500 a month and they simply can't cope anymore because with rising prices of everything these days there's just no way they can make ends meet.

I "lend" them roughly £400 a month and it's still proving tough. Lend is a funky word for me because it's more I give them that figure.

They want to use it to get rid of all the large monthly debt and to cut up their credit cards which is what they intended in the first place.

I have reviewed with them their outgoings, and we have already scrimped a lot on non-necessities... They are seeing it as a last resort because my Dad thinks it's some kind of scam and he just wanted information to see if it's "worth" doing. We already talked about the possibility that it may be "more" than he owes now and that needs to be looked into.

dimbo61

Do you think mum and dad might sell up and move to an over 55S apartment!
Lots of new places going up in my area which you can buy,part buy & part rent or just rent.
No garden to look after, no maintence on old home, cheaper gas,elec,council tax and community feeling to most places.
Money in the bank to enjoy and holidays with the money they have worked hard to earn
My dad moved into an over 55,s apartment 3 years ago and very happy