Parents - releasing equity

DeekRivers

Hello,

My mum (59) & dad (73) have a house worth approx £250k (mortgage paid)and they are looking to give two sons some early inheritance (£20k each)to help with their housing ladder hurdles.

Are there suitable equity release options that are worth considering?
Are there any qualifying restrictions?
Are there any pitfalls they should be aware of?
Does this sound a viable option to pass money down now rather than later?

Any advice would be really appreciated.

epz_2

i always think equity release is a bad idea since it doesnt give you as good a rate as a morgage and less controll over it, also i wouldnt like the idea of a 3rd party benifiting from any inprovements made to the house i made.

a 40k interst only morgage comes in about £180 a month, if i were doing it i would arrange a long term morgage for more than the ammount reqired, and use the extra to pay it off slowly.

Generali

I'd think a 59 and 73 y/o would struggle to get an i/o mortgage!

epz_2

not realy im sure ive heard of companes lendin up till the aplicants are in their 70s, granted at slightly higher rates.

think about it from the banks point of view, they are lending on a property with a 16% LTV as long as the place remains insured they really cant lose, hell the place could get abducted by aliens with no insurance and the land it sits on will still be worth well over that %.