Equity release charge to end contract £100000

Heatherrose

Hi my mum took out an equity release mortgage in 2000 without my knowledge when my dad was terminally ill for 80000. She now wants to downsize as is unable to look after the property and pay off the equity loan she is now 75. The company have said the equity to pay back is now £400000 and the redemption fee is £100,000! Can they legally charge this much to end the agreement thank you

Edi81

Yes. It would have been in the original documentation.

Did your mum get advice before taking it out?

ACG

Has your mum got the paperwork from when the mortgage was taken out?

TrickyDicky101

What's the nature of the equity release? Is it an actual 'lifetime mortgage' (ie a loan) of some description or was it a 'home reversion' - whereby your Mum would have sold a portion of the property?

You really need to see the original documentation to check what the terms were.

getmore4less

£80k to £400k (interest rolling up) in 17 years is around 9.5%
what's the house worth?

lisyloo

We looked at this in 2002/2003 (and didn't go ahead).
There was provision in the contract for moving property.
Is there any provision in the contract for moving as opposed to ending the agreement?

Thrugelmir

Heatherrose wrote: »

without my knowledge

Parents are able to make decisions for themselves.

Brynsam

Heatherrose wrote: »

Hi my mum took out an equity release mortgage in 2000 without my knowledge when my dad was terminally ill for 80000. She now wants to downsize as is unable to look after the property and pay off the equity loan she is now 75. The company have said the equity to pay back is now £400000 and the redemption fee is £100,000! Can they legally charge this much to end the agreement thank you

Why have the figures changed so dramatically from those you gave in your other post on this topic:

Hi my mum has an equity release agreement but now wants to sell her house and pay off the redemption fee after 15 years - she is 75 The equity company say she now owes £350000 (original loan was £80000) but to end the agreement early want her to
Pay an additional £150, 000! Is this normal ? And is it legal ? Thanks

Have you checked the paperwork to check what the actual position is - that's the starting point.

TadleyBaggie

I think the numbers are just made up and were pure guesswork. Get hold of the original paperwork and find out what the agreement was.