Equity release Interest - help needed

chrissy777

Hello, i hope this is the right section, i would really appreciate some advice please. My parents took out a very ill advised ER scheme back in 1984, they did not realise how the interest would mount, anyway to cut a long short my father passed away in 2010, followed by my mother in Jan this year, we were shocked to discover the interest has risen to 156k to date, house has just been valued at around 200k so will be virtually nothing left of our inheritance, BUT the bank is still charging interest on the house even after both deceased, we thought it would have been frozen until we sell the house, is this correct they can do that? we currently have it on the market and are hoping to sell asap to clear the debt. Very worried as they are adding on £600 per month each month. Help!

[Deleted User]

chrissy777 wrote: »

BUT the bank is still charging interest on the house even after both deceased, we thought it would have been frozen until we sell the house, is this correct they can do that?

You need to check the terms of the Equity Release Scheme your parents signed up for. Have you actually informed the Bank that the original owners are now deceased?

chrissy777

Weve no idea where they are, informed bank via solicitor and said both were now deceased, but they are saying the interest will continue, we thought it would stop upon death x

[Deleted User]

chrissy777 wrote: »

they are saying the interest will continue, we thought it would stop upon death x

Obviously, the scheme (and further interest) ends only when the house is sold on.
Hurry up and sell it is all I can suggest!

chrissy777 wrote: »

so will be virtually nothing left of our inheritance,

Clearly your parents knew this back in 1984 and it was their own choice to use the equity for their own purposes.

chrissy777

I dont think my father fully understood what it would amount to, he died of dementia in his later years so no one understood why he done it, he spent many years trying to sort it out, my question wasnt to do with that though, just the interest, my solicitor told me they usually freeze it until house sells, but there has been no break

[Deleted User]

chrissy777 wrote: »

my solicitor told me they usually freeze it until house sells, but there has been no break

Have you chased this with the Bank? If they say they are continuing to charge interest, then it must be part of the terms of the scheme.1984 is thirty years ago now, your solicitor likely only has experience of more recent ER schemes..

chrissy777

Solicitor is writing to them as she said it was unusual for them to continue charging after death, we dont know what the terms were

[Deleted User]

chrissy777 wrote: »

we dont know what the terms were

You can request these from the Bank.

Do also be aware that employing a solicitor in this manner is adding more money to the eventual total lost. You should deal directly with the Bank yourself.

chrissy777

It is my parents solicitor, they are dealing with the will and probate

magpiecottage

Which bank is it?

Insider101

chrissy777 wrote: »

Hello, i hope this is the right section, i would really appreciate some advice please. My parents took out a very ill advised ER scheme back in 1984, they did not realise how the interest would mount, anyway to cut a long short my father passed away in 2010, followed by my mother in Jan this year, we were shocked to discover the interest has risen to 156k to date, house has just been valued at around 200k so will be virtually nothing left of our inheritance, BUT the bank is still charging interest on the house even after both deceased, we thought it would have been frozen until we sell the house, is this correct they can do that? we currently have it on the market and are hoping to sell asap to clear the debt. Very worried as they are adding on £600 per month each month. Help!

As per previous, you need to find out the terms of the scheme they signed up for. Legally they can certain do it. After all, whether the borrower has passed away or not, they still haven't had their money back. Some may agree to freeze the interest but they are not obliged to. Many nowadays also provide a "no negative equity" guarantee which means that the debt cannot exceed the market value of the house. But these are questions best asked of the lender.