We’d like to remind Forumites to please avoid political debate on the Forum.

This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide

Equity release, is it lawful? Is it fair?

2»

Comments

  • PeacefulWaters
    PeacefulWaters Posts: 8,495 Forumite
    BobDown wrote: »
    Hes going to have to sell, he can't afford to stay. Its eating the equity.

    If he's making no payments, why can't he afford it?
  • BobDown
    BobDown Posts: 7 Forumite
    He would rather not sell, but he has to, HS2 are coming. We've been talking about it, musing over what his place is worth, what he can then afford to buy, where he would like to live etc.. Then he drops the bombshell 'oh i borrowed a little bit of money and i'll have to pay it back when we sell'.
  • Jenniefour
    Jenniefour Posts: 1,399 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker Mortgage-free Glee!
    If he's going to sell then check the paperwork very carefully indeed to find out what the early repayment charges are as well.
  • System
    System Posts: 178,426 Community Admin
    10,000 Posts Photogenic Name Dropper
    When he released equity what he most likely did was exchange a share of his house for £70k. As the value of the house increases so does that share he sold. If he now owes £170k I'm betting the value of his house has increased 2.5 times or more in 10 years.
    This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com
  • PeacefulWaters
    PeacefulWaters Posts: 8,495 Forumite
    BobDown wrote: »
    He would rather not sell, but he has to, HS2 are coming. We've been talking about it, musing over what his place is worth, what he can then afford to buy, where he would like to live etc.. Then he drops the bombshell 'oh i borrowed a little bit of money and i'll have to pay it back when we sell'.

    Hang on, first he can't afford to stay. Now he has to go because of HS2.

    This seems a bit contradictory.

    How much is the property worth? Will he get a compulsory purchase order to top it up?
  • Keep_pedalling
    Keep_pedalling Posts: 22,673 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    The only people who loss out through ER are the people who would have inherited the property, so that is probably why you are the one who is angry not him.

    Depending on where the house is located in relation to HS2 it’s value is either going to rise or fall. If it falls and the value drops below the outstanding loan amount then that is the loan companies problem not his.
  • Linton
    Linton Posts: 18,532 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Hung up my suit!
    He may be able to move the equity release mortgage to a new house. Has he asked?
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 354.2K Banking & Borrowing
  • 254.3K Reduce Debt & Boost Income
  • 455.3K Spending & Discounts
  • 247.1K Work, Benefits & Business
  • 603.8K Mortgages, Homes & Bills
  • 178.4K Life & Family
  • 261.3K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.7K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.
Update Your Picture