Equity release issues?

silvercar

fwor wrote: »

IMO it would be a very bad idea - from a financial point of view - to borrow money on equity release to give to those who will be inheriting anyway. Because when looked at in those terms, it can be a ~very~ expensive way to borrow money.

If I were you I would ask for some illustrative figures to show how much will be repaid to the equity release provider, given some realistic examples of how long your parents may live.

I suspect that you will find that the equity release will very quickly wipe out your inheritance completely.

Agree with this. They are paying interest/ loosing money from their estate in order for you to receive the money earlier than would otherwise be. Far more sensible for you to take a mortgage now.

Keep_pedalling

fwor wrote: »

IMO it would be a very bad idea - from a financial point of view - to borrow money on equity release to give to those who will be inheriting anyway. Because when looked at in those terms, it can be a ~very~ expensive way to borrow money.

If I were you I would ask for some illustrative figures to show how much will be repaid to the equity release provider, given some realistic examples of how long your parents may live.

I suspect that you will find that the equity release will very quickly wipe out your inheritance completely.

In cases like this the priority should be the financial well being of the parents, so inheritance should be a secondary consideration. They have to pay off the I/O mortgage or they lose the house. In this situation ER may be the only option, although I would limit the amount taken to cover the mortgage and the parents immediate needs and perhaps an emergency fund if they dont already have one.

Taking more out for the children is not a great idea. The equity in the home will not be touched by any care costs should the OPs mother need to go into residential care (providing her spouse remained living there), but liquidating it would be considered an asset that could be used to self fund even if it was passed to the children.