Equity Release

FATBALLZ

A relative of mine is currently in a difficult situation whereby he has purchased a house with help from his sister, and the sister is now asking for the money back. He doesn't have the savings to pay her back, and his only real asset is his share of the house.

He needs to find £44k, but is on low pay and is in his late 50s so I don't see that he can remortgage as such.

Is there any sort of financial product that would let him release the equity but stay in the house? It's a shared equity house as well which may rule him out for certain things.

If he just sells the house he won't have enough money to buy another one, and will basically end up running down all his savings paying rent.

holly_hobby

He is a little young for a lifetime mortgage, further compounded by the fact that the property is shared ownership.

Unfortunately, without sounding harsh, its obvious that he couldn't reallly afford to buy in the first place, and although his sister kindly helped him out, its only realistic that she should want her capital back at some point, and he should really have been making some provision toward this long before now.

From where I see this, he is between a rock and a hard place, before he sells up he need to obviously establish if realistically there is 44k of equity remaining in the property to repay the sister.

If there is well, there is really only one solution to this - renting isn't so bad, especially as you get older, as one advantage is that the maintenance & repairs of the property, is generally the responsbility of the landlord, which can be a God send when you can no longer get up the ladder to clear your gutters !!

If there isn't any equity or sufficient enough to make a dent on the debt, there is little point in him selling up, as rental income would probably cost at least equal if not more to, the current outlay of his mortgage & Shared Equity monthly rental charge. (assuming on standard rates and terms i.e not a non-standard arrangement i.e adverse, which have higher than typical rates).

And I would suggest him making some strict budgeting choices, in an attempt to try and gather an amount of capital together to repay his sister for her generosity, even if its just bit by bit - and hope that she will accept that for now.

I do hope someone comes along with a solution that I haven't thought off.

I wish him well in the meantime ...

Holly

Equity_Release_Guru

Sound advice from Holly. Although his age (being over 55) means that he could qualify for an equity release scheme (such as a Lifetime Mortgage which wouldn't require any payments during his lifetime), providers do not accept shared ownership properties I'm afraid.

Regards

Equity Release Guru

NeverInDebt

@ Equity Release Guru stop advertising your site as you did in another post, by all means give advice but not so you can promote your business otherwise you have a very short stay on here

kk20

I may be being stupid but I dont see any advertisements, the advice was generic with no links. Am I missing something?

BargainGalore

It was in another thread Equity Release Help, as I said now removed that why it doesn't show

kk20 wrote: »

I may be being stupid but I dont see any advertisements, the advice was generic with no links. Am I missing something?

holly_hobby

Equity_Release_Guru wrote: »

Sound advice from Holly. Although his age (being over 55) means that he could qualify for an equity release scheme (such as a Lifetime Mortgage which wouldn't require any payments during his lifetime), providers do not accept shared ownership properties I'm afraid.

Regards

Equity Release Guru

Not withstanding this particular situation (re shared equity).

ERGs comments are a little mis-leading. Certinaly there are lifetime mges available from as low as age 55, but this age is really considered a little low due to the amount of equity that may be released based upon the young age when compared to the overall fees, restirictions and amount of potential roll up of interest (which can have a significant effect to the net value of hte individuals estate on death).

Holly