Equity Release help

Miss_LovesToSaveMoney

Help please.
My mum (73) owns her own property (200k) and wants to release some equity (40k).
0% credit cards monthly payments getting too large and she'd like money to spend. She's looking at equity release which is worrying, can she get a mortgage instead?

glosoli

Some lenders go beyond the age of 75, what type of income is she in receipt of?

AnotherJoe

Why is it worrying ? In what way is the ER she might take out worse (for her, or for your future inheritance?) than a mortgage?
Both are loans, both need to be paid back. ER doesn't require immediate payback.

If she is in money trouble and having problems paying her cc bills, a mortgage doesn't seem realistic anyway ?

If you are worried about your inheritance, why not loan her the money yourself, done legally, so it's taken out of the value of the house (in the same way as ER) should that need to be taken into account for care costs. That would In effect be ER but cheaper.

Miss_LovesToSaveMoney

glosoli wrote: »

Some lenders go beyond the age of 75, what type of income is she in receipt of?

She has a work pension, so able to pay a reasonable monthly payment. I noticed Halifax lends to 80 years old.

Miss_LovesToSaveMoney

AnotherJoe wrote: »

Why is it worrying ? In what way is the ER she might take out worse (for her, or for your future inheritance?) than a mortgage?
Both are loans, both need to be paid back. ER doesn't require immediate payback.

If she is in money trouble and having problems paying her cc bills, a mortgage doesn't seem realistic anyway ?

If you are worried about your inheritance, why not loan her the money yourself, done legally, so it's taken out of the value of the house (in the same way as ER) should that need to be taken into account for care costs. That would In effect be ER but cheaper.

t

If I could loan her the money I would but unfortunately it's not an option.
I'd hate to see her paying a ridiculous amount of money back on an ER and wanted advice on what would be best.

AnotherJoe

Depends what you mean by "best".

ER may be perfectly reasonable for her, she gets a lump sum and doesn't need to pay it back until she dies or moves house. If the house is suitable for her in old age, then no issue. It's you that will have an issue with reduced inheritance.

If she is already maxed out on 0% cards, think of that as low cost mortgage, and she can't afford that, then she can't afford a mortage.

Downsizing is another possibility but I imagine you've already discounted that.

Some ER schemes allow payback to stop the loan growing out if all proportion, in effect an interest free mortgage, but I'm guessing if she is already struggling to pay 0% credit cards that would just put her back at square one.

So, maybe ER is the best option in her circumstances. Have you actually looked at the numbers for any schemes ?

waningsleep

Careful steps should be taken with ER..Borrowins will double about every 14 years thus affecting her legacy.Try other options .yourself If none take out as little as she may need.A lifetime Mortgage is just that and can prove costly.