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Equity Release guide discussion
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We have a property currently worth close to £300k and no children. We have one niece and one nephew and they will be welcome to anything in our estate when we finally pop our clogs, but we certainly don't intend to leave ourselves financially stretched to achieve that end. I have no plans currently to go the equity release route, but may well do in a few years time although I will research all available options when the time comes. I am nobodies mug, I simply don't care how much equity is left in the property when we die.
There are some lenders who will consider rental properties for Equity Release, but this is a specialist area - particularly as the valuation of flats can be an issue. Your best bet is to speak with a qualified ER broker.
Not only that, but most of the equity in people's houses these days isn't the capital that they paid off the mortgage - it's the accrued house price rises which have been tremendous in the past 10-15 years. For certain groups of people this is free cash, and it makes perfect sense to release some of it for certain things.
Even if the he owes more than the value of the property, you cannot inherit his debt when he dies.
If you are in any doubt speak with the equity release provider.
Ride hard or stay home :iloveyou:
In 5 years the remaining equity has remained static so it is unlikely the house will not be able to pay off the loan, and even if it did the most the ER are going to get back is 100% of the house value even if the estate contains other assets.
ER companies are pretty good at how much they will lend against a house to make sure they get their loan and interest back.
As an Equity Release Lifetime mortgage is only paid off when you die (or go into care) it is their problem if it doesn't sell, so they won't offer a mortgage just in case.