Is Equity Release An Option?

Danny02_2

Hi All, I'm writing for a friend who is deeply in debt and in need of help. The only light at the end of the tunnel for her is the fact that she has at least £100K equity in her property. Is there any way she can get that out? She can't remortgage as her lender won't give her any more because she can't afford to repay anything more - her outgoings are more than what comes in. I've looked at equity release briefly for her and they all seem to be for the over 55's/retired people only. Any suggestions?

misspoppy

Could she sell up and down size?
Probably best to give us some more information and ideally an SOA

Danny02_2

Can't give any details for her, I'll have to get her to register on here and do that herself, but she basically is at rock bottom, no spare cash whatsoever, 2 young boys wanting things, no money for petrol, just really bad news at the moment. She's thought of selling up but of course will still need a home and doesn't want to waste that equity on renting, and will she then ever get back on the property ladder. She seems trapped!

misspoppy

Well if she can come on here we will do our best to help her, but without any info there is no way to give her any advice. If she can't face speaking on here ask her to contact the debt charities CAB, CCCS or payplan are a few tostart. on the formum page there is a thread called guideance for first time posters with lots of links and help.

Danny02_2

Thanks. But have you ever heard of equity release for NON retirees?

astreix

Danny02 wrote: »

Thanks. But have you ever heard of equity release for NON retirees?

No is the short answer, if your friend and her partner (if any) are younger than 60 years.

You don't mention the age of your friend so difficult for me to be more specific. However (as you might already know) the younger the borrower(s) the lower the LTV lenders will offer you. Given your friend already has a mortgage, this might be relevant even if she find a lender willing to do Equity Release. From my experience I've seen LTV's of around 30% offered to borrowers around 60 yrs old.

Danny02_2

Sorry, she's 41 with no partner worth mentioning!!

Tixy

If she is struggling because she has unsecured debts to pay then the organisations misspoppy lists will almost certainly be able to help her. If she is struggling just to meet her basic living costs and can't reduce these costs down anymore then selling the house (to either downsize or rent) may be the only sensible option.

mrsg1933

If your friend is over 55, you need to mention the Loan To Value of her property. You say she has £100k equity which is a substantial amount but if the house is worth £600k it starts to look quite small.

Usually, she would need to release more than her mortgage remaining and the amount she can release will vary with her age. Google Responsible Equity Release, they explain it quite well.

If she is under 55, then if she can sell up, she has £100k to look for a new house, minus all selling fees of course. It may mean moving to a different area but from what it sounds like, this may be the least of her worries. :money: