releasing equity

alb066

My parents, who have now both retired, have cleared their mortgage several years ago and own their property outright.
They are having some money difficulties at present and it was suggested that they release some of the equity from their property. Does anyone know if this will be possible and how to go about it???

Thanks

hansi

I suggest you do a search on the forum for equity release. There have been anumber of discussions about this.

Annisele

The Financial Services Authority publishes a guide to equity release, which might be helpful to you as a starting point. You can find it here. (If that link doesn't work, try this one and scroll down to the bottom of the retirement options section.

Lapadore16

Does anybody know of a retirement mortgage that lets you release money as as when you need it but not having to repay it back? We have been long term customers of the Halifax and they have been most unhelpful. They could only give us a secured loan against the house, £15,000 and charge us £60 a month for it.
I have contacted a financial advisor who thought he could track down a way to change but he phoned today and said he can't. He told me unofficially to contact Saga but their web sit is down at the moment. We still have a small mortgage on the property but neither of us work. I am 58 and am disabled my husband is 70.
Any ideas? Thanks.

Wh05apk

Alb066 your parents generally have 2 options if they want to raise capital (ignoring at this stage advice about managing their budget which I am sure someone will suggest!)
1/ raise a conventional mortgage to consolidate their debts, on either an interest only basis or repayment basis, assuming they will be able to afford the repayments.
2/ or a lifetime mortgage aka equity release, this will release a lump sum or regular income if their income is insufficient, they will not make repayments, but the loan will be repaid on death/sale of the property, it will be more costly in the long run - reducing your inheritance! but could solve their problems now.
#4
Lapadore16 option 2 may be suitable for you, you could take the loan on a drawdown basis, working almost like an overdraft, however given your age of 58 you may be looking at a total facility of less than 20% of the value of your property which may be insufficient?

alb066

Wh05apk wrote: »

Alb066 your parents generally have 2 options if they want to raise capital (ignoring at this stage advice about managing their budget which I am sure someone will suggest!)
1/ raise a conventional mortgage to consolidate their debts, on either an interest only basis or repayment basis, assuming they will be able to afford the repayments.
2/ or a lifetime mortgage aka equity release, this will release a lump sum or regular income if their income is insufficient, they will not make repayments, but the loan will be repaid on death/sale of the property, it will be more costly in the long run - reducing your inheritance! but could solve their problems now.
#4
Lapadore16 option 2 may be suitable for you, you could take the loan on a drawdown basis, working almost like an overdraft, however given your age of 58 you may be looking at a total facility of less than 20% of the value of your property which may be insufficient?

Thanks for your advice..yes, I had been thinking about a lifetime mortgage.. I don't want my parents hardearned money..why leave it to me and my siblings when they could be enjoying their twighlight years..I would rather see them happy, doing things they want to do, and possibly live longer without stressing about money..glad people like you are on this site..thanks again.

sebastianj

Lapadore16 I think differently, help your parents try and remortgage the property and check out what the repayments are. If you have a close nit family then you all can chip in to pay any repayments which will be much cheaper than the option 2. It may be the best way for you all to save something for the future.
Just think about it, £15-20k is nothing compared to the investment returns,
seb