equity release

bobsky_2

I dont fully understand this product.

I have 48k debts and my mother is sitting on a 140k house.
Would it be worthwhile making use of this equity (no mtg/sec loans) in the property to pay of my debts. Obviously my mun would have to agree.

How would it work etc. Can anybody give me an Idea of how much it cost me? I suppose its better than entering into debt crisis plan (DMP).

I seriously need help to become debt free.

thanks:A

CLAPTON

how old is your mother?
what is her income?
would she be happy to incur a debt of 48k for you?

dunstonh

Other questions....

Is your mother in receipt of pension credits or means tested benefits?
Is she likely to require long term care ?

bobsky_2

she is 67 and she gets pension, not sure how much. she also gets income from my brother who lives with her. i am not sure how this would work. I would be willing to contribute to a monthly payment aslong as it less than what i am paying my creditors at the moment.

bobsky_2

my mum gets pension credits/widows pension etc, not sure how much. she will not require long term care now she is only 67. she lives at home with my brother also. my idea is to ask (nicely) for a lump sum payment and then instead of paying my creditors I would "loan this money back to my mum" if this is possible.

dunstonh

If she gets pension credits then equity release would be seen as generating capital. Gifting that capital would then be seen as deprivation of assets on the means test. A figure of the amount you mention would wipe out her pension credits and the associated benefits that go with it.

Cannon_Fodder

Post your SOA on the debt-free wannabe forum before making any decisions...

yelf

The way it works is (taking into account her age and the figures): you would most likely have to look at a home reversion plan as opposed to a lifetime mortgage. What this means is that a lender will lend your mum £48K with no repayments but they then own the house, although she can live there til she dies or moves out.

Instead of that look at the Halifax Retirement plan to release the £48K, but you yourself make the monthly payments back to the Halifax.

bobsky_2

thanks looks like its a no no.

bobsky_2

that's what I was thinking but was not sure of how it works....maybe worth a shout.many thanks

bobsky_2

can you add the link for halifax retirement plans here please. I can find it on halifax webite. many thanks