Releasing equity on my property

Mumknowsbest

Hello everyone

I hope someone here can give me some advice. I'm wondering if there is a way to release some equity from my home to give o my daughter as a gift to use as part of her deposit for a property. The situation is as follows:
I own my on home (no mortgage).
My daughter & son in law are selling their property and have found a property to buy.
They are putting down a large deposit (£125k)
They property they have found is £288k
Lender only willing to lend them £ 131k
Shortfall of around £32k

My property is worth around £260k

I would like to release £35k to give them (my daughter would be getting a third share of this house anyway).

Is there any way I can do this without re-mortgaging as I am 72 and doubt very much I would get a mortgage.

Also, does anyone know how quickly this could be done and if there are any implications in doing this.

Thank you.

holly_hobby

Seeking a remortgage

Your age will be an issue with most lenders having a max redemption age of 75 yrs, although there are a couple of lenders that don't have this upper age restriction.

This will have to be on a capital and interest basis, and your income will have to be sufficient to service the mge throughout its term.

You will have a duty to maintain the mge until it has been repaid, which will obviously be a financial commitment in your name.

The other alternative would be via a lifetime equity release mortgage, which has no upper age limit, or requirement for monthly repayments (with the interest effectrively rolled up on the debt). Which given the figs you have a quoted would be possible, BUT unless you source a lender whom permits monthly repayments to ringfence the debt, the free equity would obviously be eroded over time. You should also be aware that interest rates and fees are higher than with traditional residiental mortgage arrangements.

If you want to explore either a residential of lifetime mge, source a suitable whole of market mortgage broker whom will discuss the options and figs with you.

Hope this helps

Holly

GMS

Where have they tried to get the finance?

Have they tried a broker to see if a lender would do it?

What are their incomes? How many children? Any credit commitments such as loans, HP or credit cards?

Mojisola

Mumknowsbest wrote: »

My daughter & son in law are selling their property and have found a property to buy.
They are putting down a large deposit (£125k)
They property they have found is £288k
Lender only willing to lend them £ 131k

Shortfall of around £32k.

In that case, shouldn't they be looking for a property costing around £250/255k?

Mumknowsbest

Mojisola wrote: »

In that case, shouldn't they be looking for a property costing around £250/255k?

They have found a property which meets their specific needs in an area which circumstances dictate they are based. Unfortunately, it is more than they can afford "on paper" (even though their current mortgage is higher than the figure quoted). Hence the reason I would dearly love to help them.

Mumknowsbest

GMS wrote: »

Where have they tried to get the finance?

Have they tried a broker to see if a lender would do it?

What are their incomes? How many children? Any credit commitments such as loans, HP or credit cards?

They went back to their current lender I think but their circumstances have changed since they got their last mortgage. (Not sure who the lender is I'm sorry). I'm also unsure as to their incomes although I believe it's around £38000 (joint) and they have 3 children (although 1 is 18). Credit cards, not sure I'm afraid.

Apologies for not having specific details but I haven't mentioned this to them, I wanted to know if it was possible first.

GMS

Tell them to try a broker. May not be able to get want but if not at least they will have explored the options without doing it themselves.

Possibly save you from having to risk your property.

Mumknowsbest

GMS wrote: »

Tell them to try a broker. May not be able to get want but if not at least they will have explored the options without doing it themselves.

Possibly save you from having to risk your property.

Thank you. They are going to consult a broker to see if there are any options open to them. I just wanted to find out if my idea was possible.

Thank you again.

GMS

Seeing a broker will explore all options. If it isn't possible on their own then they will know. From there it can be explored whether your home and/or their inheritance can be used.

Accessing the current lender will give the answer on a sole institution's product's or not. They say no and you may choose to risk your home.

You may well be able to release equity but any Equity Release type loan needs careful, consideration and may well be considered last resort.

Please please seek the advice of a reputable broker before making any potentially life changing decisions.

RachelMC

I'm now 60 and re-mortgaged on my property on a 10-year term 5 years ago. I have no dependants and although get a decent occupational pension, my monthly income is just about maximised with my lifestyle!

So, I would like to have cash now to enjoy my life earlier rather than later. I could depend upon Occ. Pension+State pension to fund future old age care.

I've started some discussion with my IFA, but still hesitant until I know all the ins and outs. I assume I can use the equity release to pay off the remainder of my mortgage and free up that monthly repayment to spend or save?