Releasing equity in 100% owned property

dannyken

My mother (76) and father (88) own their own home outright (worth around £150,000) as well as a second home outright (similar value) which they let out. Neither property has ever had a mortgage or other debt secured against it. They want to release equity of around £20,000 from the value of the second home - given their age, are they likely to be refused a new mortgage or a secured loan? This property is currently let and brings in around £350 pcm, and if/when it is inherited by me and my siblings, we would plan to continue letting it. Or would equity release be a better option for them? Any advice appreciated! (PS both properties are in Northern Ireland, if that makes a difference)

sheslookinhot

dannyken wrote: »

My mother (76) and father (88) own their own home outright (worth around £150,000) as well as a second home outright (similar value) which they let out. Neither property has ever had a mortgage or other debt secured against it. They want to release equity of around £20,000 from the value of the second home - given their age, are they likely to be refused a new mortgage or a secured loan? This property is currently let and brings in around £350 pcm, and if/when it is inherited by me and my siblings, we would plan to continue letting it. Or would equity release be a better option for them? Any advice appreciated! (PS both properties are in Northern Ireland, if that makes a difference)

Give them the £20,000 yourself.;)

Your helping out your parents and inheriting a property that will be worth more.

McKneff

I toally agree, so there must be at least 3 of you.

Surely it wouldnt be too much to give or lend (at no interest) you parents less than £6.5k each. you will all be getting this back tenfold or more.

Lets face it, mum and dad could sell the 2nd property, blow the lot, cruises, fast cars, booze, parties
and you and your siblings woudl inherit 1 property between you.
It would be £6.5k well spent in my opinion.

Captain_Chaos_2-2

Agree buying the property between you and others maybe is a very good idea they can gift moneis back to utilise tax benefits which can be used to redeem mortgage payments. other option is equity advance

few different routes here sell a portion of the house to firm parent pay nothing monthly until the pass the interst is rolled up the firm take thier original stake plus the interst remainder goes into estate load of variations for this.

I dont know of any lenders who would give a straight forward BTL or residential mortgage to yourparents at the age sorry mate

1st option I would explore.

dannyken

I should have explained - the money is to help one of my siblings who is in financial difficulties. I'm not in a position to help, and the third sibling refuses to (not all families see eye to eye on such matters). However they have asked me for advice, so any answers to the questions I actually asked would be very gratfeully received. (I know Captain Chaos had a go, but his answer lived up to his name as far as I could tell!)

Captain_Chaos_2-2

See if we can help from another angle whats the siblings money problems

dannyken

Not sure of all details but basically a lot of unsecured debt, at least one loan and a couple of credit cards I think - he's recently lost his job and can't cover even basic repayments which I think are in excess of £700 PCM. He doesn't want to do any sort of IVA or bankruptcy as he has a joint mortgage and thinks it will affect his other half's credit rating (and I was assuming he's right). He plans to repay the money when he's back on his feet - personally I think that's optimistic but I don't mind. I'm not well off but have very little debt, wouldn't swap with him for anything.

Captain_Chaos_2-2

Ok a good start would be for him to have a look at the unenforcable debt threads, and PPI claims and bank charges these things tend to come hand in hand.

If he can get away without paing anything at all or very little thats the first thing I would do.

Dont really know eher else to go with the mortgage suggestins think all aveniues have been covered really.

If he out of work put it forward like this.

if he haad to write 1 letter a day for the next year to get rid of the debt and perhaos not pay it its almost the same as someone giving 20k for a letter day after 12 months.

dannyken

Captain_Chaos wrote: »

If he can get away without paing anything at all or very little thats the first thing I would do.

Well, duh. But how would he do that? Wouldn't that immediately wreck his credit rating? I'm not sure why that's so important to him by the way, since I doubt he wants any more debt - it may be to do with his mortgage or partner.

And the thing about writing letters I'm afraid I just don't follow.

Captain_Chaos_2-2

Unenforcable debt is a breach in terms contract whatever so no it would not wreck his credit rating. at the top of the page click the link reclaim 1000's the site owners having taking the liberty of laying out a dumbied guide to getting the jobe done pre formatted letters just fill in the blannks as for knowing what the debt is I'm clearly speculating I know less than you but am just picking up on things you said "unsecured debt" he will get gain more debt by doing this he will get off debt by doing this if its his partner they they need to right the letter if he has unsecured debt or bank charges or loans with PPI on or i she has anything like that then its all relevant.

Just trying ti help

getmore4less

dannyken wrote: »

Not sure of all details but basically a lot of unsecured debt, at least one loan and a couple of credit cards I think - he's recently lost his job and can't cover even basic repayments which I think are in excess of £700 PCM. He doesn't want to do any sort of IVA or bankruptcy as he has a joint mortgage and thinks it will affect his other half's credit rating (and I was assuming he's right). He plans to repay the money when he's back on his feet - personally I think that's optimistic but I don't mind. I'm not well off but have very little debt, wouldn't swap with him for anything.

I think you are right.

The loss of job is not the problem the previous over spending is.

Bailing out is usualy a bad/worst option,

kill the credit ratings first so they can't carry on once back on their feet.

Lend money and once working they will still spend before paying back, thats why they have debt now.