Equity Release - trying to redeem

neilsue

My father has recently died and my mother is being cared for between myself and my sister in our homes. She has been living in her home since the age of 5 and is now 80. Their home has been in my mothers family since she was 5 and the prospect of selling her home is too much for her to deal with on top of her illnesses and the death of my father. The property has a life time mortgage on it (equity release). We need income from the property (as Mum gets no state support) to pay for care that my sister and I need as we are both working. We are looking therefore at letting the property. We have had very high and positive rental valuations on the property and the loan to value percentage of the equity release to the the value of the property is less than 30%. The equity release firm are happy for the lifetime mortgage to be repaid, and without penalty, but will not allow the property to be rented out. We therefore have got to pay off the equity release in order to let out the property. According to the mortgage broker we have spoken to, given my mothers age, there are no buy to let companies (assuming that it is the repayment vehicle we are looking at) that will lend her the money on the basis of the rental income alone even thought we are only looking at a 2 year loan. Myself and my brother and sister have power of attorney over my mothers property and financial affairs but we are all in properties with mortgages on and as we are not named on the property which is in my mothers name, we are excluded from being able to take out the mortgage to repay the equity release ourselves. Can anyone advise us of any companies who do lend to redeem equity release/lifetime mortgages in these circumstances of if you can offer any other advice.

Thanks in advance for your help.

Windmill67

Hello, I'm so sorry to hear of the situation your mother is now in. It's a very difficult spot as you can't repay the mortgage for her and at the age of 80 her options for lenders are extremely prohibitive. I'd say, although be happy if i was proved wrong, that there's no lenders out there at the moment that would consider anything other than an equity release product. I'd stake my teeth on there being no BTL options out there I'm afraid.

Options appear to be sell up and repay the loan OR

Just letting the property out and not telling the equity release company. Obviously this isn't massively advisable but what's the worst that the equity release company could do. Say it's unacceptable and ask you to repay the loan. I'd doubt they'd even consider taking serious legal action tbh. Of course this kind of approach could back fire but then it might give you a couple of years breathing space to work out what to do.

VIGILANT22

Windmill67 wrote: »

Hello, I'm so sorry to hear of the situation your mother is now in. It's a very difficult spot as you can't repay the mortgage for her and at the age of 80 her options for lenders are extremely prohibitive. I'd say, although be happy if i was proved wrong, that there's no lenders out there at the moment that would consider anything other than an equity release product. I'd stake my teeth on there being no BTL options out there I'm afraid.

Options appear to be sell up and repay the loan OR

Just letting the property out and not telling the equity release company. Obviously this isn't massively advisable but what's the worst that the equity release company could do. Say it's unacceptable and ask you to repay the loan. I'd doubt they'd even consider taking serious legal action tbh. Of course this kind of approach could back fire but then it might give you a couple of years breathing space to work out what to do.[/QUOTE]

You obviously have some industry inexperience reading your post. THIS IS THE MOST IRRESPONSIBLE POST I HAVE READ ON HERE.

...you say the worst that can happen is they recall the loan!!

If anything happened to the property and a claim had to be made on the insurance and the OP followed your suggestion (letting out) ...it would be deemed null and void....A lady who is now 80 and has lived there since she was 5 would be left with nothing....aaarrgh:mad:....think before you post!

getmore4less

neilsue wrote: »

My father has recently died and my mother is being cared for between myself and my sister in our homes. She has been living in her home since the age of 5 and is now 80. Their home has been in my mothers family since she was 5 and the prospect of selling her home is too much for her to deal with on top of her illnesses and the death of my father. The property has a life time mortgage on it (equity release). We need income from the property (as Mum gets no state support) to pay for care that my sister and I need as we are both working. We are looking therefore at letting the property. We have had very high and positive rental valuations on the property and the loan to value percentage of the equity release to the the value of the property is less than 30%. The equity release firm are happy for the lifetime mortgage to be repaid, and without penalty, but will not allow the property to be rented out. We therefore have got to pay off the equity release in order to let out the property. According to the mortgage broker we have spoken to, given my mothers age, there are no buy to let companies (assuming that it is the repayment vehicle we are looking at) that will lend her the money on the basis of the rental income alone even thought we are only looking at a 2 year loan. Myself and my brother and sister have power of attorney over my mothers property and financial affairs but we are all in properties with mortgages on and as we are not named on the property which is in my mothers name, we are excluded from being able to take out the mortgage to repay the equity release ourselves. Can anyone advise us of any companies who do lend to redeem equity release/lifetime mortgages in these circumstances of if you can offer any other advice.

Thanks in advance for your help.

Assuming the house is now mums with the equity loan through Inheritance/Survivorship, has this been through probate?

How much do you need to raise to pay these people off?
Can you raise it another way on your own homes and resolve the situation that way.

What about one of you moving into the house?

I don't get the 2 years bit of our post.