best way to release equity

debtfreedave

To keep a long story short I am in the process of getting divorced and as part of that need to come up with about £40K I don't have. My parents are happy to help but aren't sure on the best way to proceed.

They are both retired and own their house (a low end valuation, to be on the safe side, would be £300K). I also have an eldery grandparent also owning their own home with no mortgage (low end valuation £125K).

Without being cruel my remaining grandparent is well into her 90s and not in the best of health so, as my parents are keen on reminding me, they will inherit that house sooner rather than later. That would enable my parents to repay any equity release taken out now.

What is the best option? I've looked into some equity release plans but they seem to be designed around no repayment until death and with compound interest being applied for potentially over 25 years thats not really something we'd want to do. There also seems to be large penalties for any early repayment. Really what they need is some sort of mortgage / secured loan, having a monthly payment isn't an issue, that allows overpayments and / or early repayment but age becomes a problem in getting those.

getmore4less

what are you trying to protect/keep with this £40k.

debtfreedave

It's part of the divorce settlement.

TrickyDicky101

Do you have your own property on which you could raise the £40k? If there are no available marital assets, how come you are having to hand over £40k?

p00hsticks

debtfreedave wrote: »

I also have an eldery grandparent also owning their own home with no mortgage (low end valuation £125K).

Without being cruel my remaining grandparent is well into her 90s and not in the best of health so, as my parents are keen on reminding me, they will inherit that house sooner rather than later. That would enable my parents to repay any equity release taken out now.

The phrase "don't count your chickens...." comes to mind.....
In a worst case scenario, the better part of £125k could pretty quickly get gobbled up in care home fees.

debtfreedave

TrickyDicky101 wrote: »

Do you have your own property on which you could raise the £40k? If there are no available marital assets, how come you are having to hand over £40k?

No property to raise the £40K on. As for the settlement basically she could afford a much better lawyer than me and I got taken to the cleaners.

p00hsticks wrote: »

The phrase "don't count your chickens...." comes to mind.....
In a worst case scenario, the better part of £125k could pretty quickly get gobbled up in care home fees.

Was more in there for information, certainly won't be reliant on it and can continue paying the monthly payments until the full amount is paid off.

amnblog

debtfreedave wrote: »

What is the best option? I've looked into some equity release plans but they seem to be designed around no repayment until death and with compound interest being applied for potentially over 25 years thats not really something we'd want to do.

You need to look again at this. You can pay the interest if you wish, the market has moved on considerably from the days of horror stories in the Money Mail.