Release capital from house

bhushanvaidya

I wonder if anyone would be able to help me out with some advice. My in-laws have recently paid off their mortgage on a house worth about £450K. My sister-in law and her husband are currently in rented accomodation and are looking to buy a house but have no deposit to put down. They have heard of a scheme where my in-laws would be able to release some capital from their house (in advance of them passing away!) to give to them so that they could use it for a deposit. My wife and her sister would be the only people to inherit their possessions anyway, when they passed away.
What would be the risk to my in-laws of doing this and what, if any, effect would it have on my wifes inheritance in the future.
Your advice will be appreciated.
Bhushan

Debt_Free_Chick

I'm not sure of any special scheme - maybe looking at Age Concern, as they have lots of information on this kind of stuff.

https://www.ageconcern.org.uk

Otherwise, your inlaws can simply remortgage their existing home e.g. get a mortgage for the deposit, give deposit to your sister-in-law. Your parents would need to decide if and how they repay the deposit.

Galstonian

This is simply borrowing of a different sort, repayment being deferred until the death of your in-laws. It is fraught with difficulties and is certainly not cheap especially if interest payments are deferred. Transfer of assets in this way may be subject to inheritance tax or local authorities may try and say they had a prior claim on the property if your in-laws require residential care. Your in-laws may not die for a long time, your sister-in-law could die first, there are lots of things might cause the plan to go awry.

The cheapest way to do it is (as suggested) is for your inlaws to remortgage, standard mortgages are almost always the cheapest way to borrow and then writing up a loan agreement with your sister-in-law becomes much more straightforward.