Inheriting my fathers house that has equity loan on it

Wookie123

Hi, I really want some advice, my father is 78 he owns his own house rough value £300k he has an equity release loan on the property of 100k, so when my father passes although the house will be left to me I will have to sell it to pay off the equity. My question is, is there anything we can do now to save this from happening, I.e get a mortgage out to pay off the equity and my dad signs the house to me now, can we pay the equity back monthly?? Any advice would be muchly appreciated. Thank you x

dzug1

You should be able to get a loan when you inherit to avoid having to sell

Having the house now has its difficulties - deprivation of assets for care home and benefits for example. Possible IHT if he dies within 7 years with a large enough estate.

You need to go into it with expert advice

Wookie123

Thank you for your reply. Just one more question, wouldn't the equity people own the house though once my dad has past? Or do they just own the loan?

Wookie123

Would you say a financial advisor or a solicitor would be best for advice on this kind of matter?

RAS

You need to start by talking to a lawyer so you understand the contract, then speak to someone who understands equity release when you know exactly what questions you need to ask.

getmore4less

As above deal with this loan now, find out what sort it is what the terms are and what the penalties are for trying to pay it off early or at all.

if nothing is being paid then there is a good chance the interest is compounding.


Any hint of missselling, poor advice, deal with it asap, before there is only one side of the story available.

Wookie123

Thank you. Do you think I should just ring up the equity people?

getmore4less

get the contract out and read it

Errata

Wookie123 wrote: »

Thank you. Do you think I should just ring up the equity people?

No, because they won't speak to you. Ask your father to talk to them.

margaretclare

Your father may live for a good number of years yet. When he finally passes on you will have all the rest of the equity, whatever the value may be at that time, and you only need to raise a mortgage to pay off the 'lifetime mortgage' (equity release) which is in Dad's name. That's assuming you want to keep the house to live in.

AFAIK it's quite usual to raise one mortgage to pay off another one. That's what we did in 2002 - took out a 'lifetime mortgage' to pay off the existing one which would have continued until we're 83.

dzug1

Wookie123 wrote: »

Thank you for your reply. Just one more question, wouldn't the equity people own the house though once my dad has past? Or do they just own the loan?

I don't actually understand what you mean by 'the equity people'.

If your father has sold the house to an equity release company, then they will own it when he dies. He will have left over whatever cash they gave him that he hasn't spent. Assuming he 'sold' them the whole house.

If you mean your father has taken out a loan on the security of the house (effectively a mortgage even if it's not called that) then the loan company owns the loan. They can force sale of the house if it's not paid off. If it is paid off they won't care.