Equity Release Cunundrum!!

Mustbeananswer??

An interesting Scenario....

I come from a very close family.My Mother is not that well and worships me and my two siblings.I am close with my Brother and Sister.


The problem is this.I am the spendthrift one and my Brother and Sister whilst not being rich have managed to recently clear their mortgages....so are not in any great need of cash-flow....unlike myself.

My Mother haa a house that would be valued at £300,000.There is no outstanding Mortgage.It is signed over jointly to the three of us.

I have heard of Equity Release but am not sure how it works.I would like to present a case to my Brother and Sister for considering this option but am not sure of the Financial Implications for them.If they are to be out of pocket I would like to know how much it would cost them annually so that on my Mothers passing I could re-imburse them with what they have lost by investing in the option.

Are the Equity Release Payments a lump sum or a monthly payment???I'm 53 and have worked really hard all my life ....I need to bridge a gap that gets me to nice Civil Service Pension at 65.I owe £60,000 on a property valued at £110,000 by the Local Estate Agent(less .....of course by Santander).I'm waiting for a decision on a second mortgage from them to clear about £15,000 of short term debt.

I'd like the confidence to make a career change as I'm finding it hard keeping up with the Youngsters at work.A cash injection would help a great deal.

In no way must I put my Mothers living position at risk.

Any Ideas please???

SeniorSam

The only winners in Equity Release are the companies lending the money. However, if the property has been signed over to the 3 of you, you will not be able to effect an Equity Release because of age. There is a minimum age. IN any events, it would be most unwise for this to be done, even if it could, unless you wanted to sell your interest in the home to your siblings, so they could pay you off.

The fact that the house has been signed over to you and your siblings will probably not be of benefit if your mother has to go into care. The costs of care will need to be met from the value of her home, so future cost is likely.

Sam

moonrakerz

As has already been said, Equity Release benefits only one party in the the deal - the lender ! You need to get proper independent advice on this and understand what the long term costs are and the possible implications with regard to future disposal of the property.

Another point to consider at the present time: An Equity Release lender lends a fixed amount, houses are falling in value at present. The lenders share of the house will, in effect, be growing as each day passes - you could end up with nothing !

I must confess I do also worry when I see statements like this:

Mustbeananswer?? wrote: »

My Mother haa a house that would be valued at £300,000................It is signed over jointly to the three of us.

Your mother can't have a house if it is "signed" over to someone else.
Far too many people seem to believe that "signing" the house over is the universal panacea for all potential financial worries relating to an ageing person who owns a property.
I worry, especially when this "signing over" is done on the "back of a fag packet" that this is another ill considered move.

Be VERY, VERY careful..........

bendix

I have nothing but disdain for people who seem to think the answer to their financial woes (brought upon by being spendthrifts) is leveraging the cashcow that is their parent's property, earned over a lifetime through hardwork and shrift.

Seriously, what is wrong with people? How did this generation get so selfish and short-sighted?

Mustbeananswer??

bendix wrote: »

I have nothing but disdain for people who seem to think the answer to their financial woes (brought upon by being spendthrifts) is leveraging the cashcow that is their parent's property, earned over a lifetime through hardwork and shrift.

Seriously, what is wrong with people? How did this generation get so selfish and short-sighted?

Accept what both posters say......



On the flip-side.....Mum has said without prompting(as my financial woes are only just beginning to worry me) that she would like to be here to see us all benefit from her and Dads toil.Up to you if you believe me or not.


I surely can't be the only person who's ever been in this situation??:(:(

bendix

Mustbeananswer?? wrote: »

Accept what both posters say......



On the flip-side.....Mum has said without prompting(as my financial woes are only just beginning to worry me) that she would like to be here to see us all benefit from her and Dads toil.Up to you if you believe me or not.


I surely can't be the only person who's ever been in this situation??:(:(

You are an adult human being in a western democracy (with all the benefits and opportunities associated with that). You work in the public sector, with all the securities offered by that.

And yet in your mid-50s you are STILL relying on your parents to save your financial problems which - by your own admission - have been caused by you being 'a spendthrift'.

You are NOT in a 'situation'. You are precisely where you put yourself.

The fact that you are hovering over your mum's house like an expectant and hungry vulture is just awful.

Of course your lovely old mum says she wants you to benefit from it. She would, wouldn't she? If you had any integrity or self-pride you'd point out to her that giving her house away could have disastrous consequences on her long-term care needs, but I don't suppose that matters really, does it?

Mustbeananswer??

bendix wrote: »

You are an adult human being in a western democracy (with all the benefits and opportunities associated with that). You work in the public sector, with all the securities offered by that.

And yet in your mid-50s you are STILL relying on your parents to save your financial problems which - by your own admission - have been caused by you being 'a spendthrift'.

You are NOT in a 'situation'. You are precisely where you put yourself.

The fact that you are hovering over your mum's house like an expectant and hungry vulture is just awful.

Of course your lovely old mum says she wants you to benefit from it. She would, wouldn't she? If you had any integrity or self-pride you'd point out to her that giving her house away could have disastrous consequences on her long-term care needs, but I don't suppose that matters really, does it?

Look...you are quite viscious and there really is no need.



Like anyone who is getting backed into a corner I am looking for options.I have been very poorly at work and am having concentration problems.....I worry about my ability to get to State Pension Age intact.That worries my family too.

I came here to discuss how the scheme works.....not what a dreadful citizen I am.

TrickyDicky101

Is there the possibility that you could raise cash by selling your stake in the house to your brother/sister? I don't really see any form of equity release being appropriate or desirable (especially not for your siblings).

bendix

Mustbeananswer?? wrote: »

I have been very poorly at work and am having concentration problems.....I worry about my ability to get to State Pension Age intact.That worries my family too.

.

Ahhhhhh. Yes. I kind of thought that might be coming.

What a sick nation we are. What would Maslow make of it all?

Mustbeananswer??

TrickyDicky101 wrote: »

Is there the possibility that you could raise cash by selling your stake in the house to your brother/sister? I don't really see any form of equity release being appropriate or desirable (especially not for your siblings).

Whilst they have their Mortgages paid off I don't think they have that sort of cash laying around.....but thank you for your consideration.I'll probably survive....I always have done.....


Off sick from work as well.....total burnout last week!!The other poster thinks I'm putting it on.10 years succesful employ with The Government....exemplary attendance record!!

What has screwed me is getting the thin edge of the wedge in 2 divorces!!

Excususe excusues .....I know.

Rob_192

Mustbeananswer

Don't worry about Bendix, he's known for being a grumpy so-n-so. Just a good job you didn't ask about cashing in your pension, then he wouldn't have been quite so polite:D

This thing which struck me by your opening post was when you said your mum's house was signed over to you and your brother and sistser. What do you mean by this? Presumably, more than just her leaving it in her will? If she has efectively gifted it to you all jointly, there is still every chance that the money could be clawed back were she to have to go into care. I don't know the legalities of this, but a few years ago, we investigated a similar thing with regards the inlaws' house and we were advised that it isn't a simple matter - there are almost certainly others on this board who could provide the details.

The point I'm trying to make is don't rely on getting your share - nice bonus if it works out, but dont rely on it.

Good luck

R