Options to equity release

NewShadow

Morning All,

My mother and her partner would like to move from South Wales to Lancashire.

They're both 65+ and both retired with a joint income of around £2.5k a month.

They own a house in South Wales which will be worth in the region of £80k and want to buy somewhere that will cost around £80k

My mum is a bit of a spitfire and, now they've decided to move, wants to move now! :D

They have around £40k in savings - and I've offered my £25k but I doubt they'll accept.

Any options to equity release £40k on the current property given their circumstances?

The intention would be to repay the loan in full upon the sale of the house.

Thank you kindly

Bossypants

Why do they need that much cash before moving? Do they want to buy the new place before they sell the current one?

Red-Squirrel_2

I don't understand, surely they will just put theirs on the market, start the process of buying the new one, and move on the day both the sale and the purchase complete?

NewShadow

Red-Squirrel wrote: »

I don't understand, surely they will just put theirs on the market, start the process of buying the new one, and move on the day both the sale and the purchase complete?

I'm a little shocked as well

Mum has seen a house she wants to buy - she wants to go in and offer to buy it this week.

The house in South Wales is yet to go on the market and houses in the area move slowly.

They're basically looking for a way to buy the house in Lancashire now and allow the house in SW to sell in it's own good time.

Bossypants

I doubt they'd get equity released this week, and they would still need to make up the other £40k somehow (or £15k if they accept your loan offer). Are they planning to get a mortgage on the new place to make it up?

I do fully sympathise with your mother as I am in exactly the same position at the moment, having found my dream house unexpectedly and now hoping desperately to get an offer on my place before it gets sold to somebody else. In my desperation, I've also considered various 'alternative' (read hair-brained) schemes to try to avoid having to sell in order to buy, but have had to come to the hard conclusion that I'm just going to have to wait and hope, like so many others in this situation. My sympathies to your mother, in any case, I really hope they can get the house they want!

NewShadow

Bossypants wrote: »

I doubt they'd get equity released this week, and they would still need to make up the other £40k somehow (or £15k if they accept your loan offer). Are they planning to get a mortgage on the new place to make it up?

I do fully sympathise with your mother as I am in exactly the same position at the moment, having found my dream house unexpectedly and now hoping desperately to get an offer on my place before it gets sold to somebody else. In my desperation, I've also considered various 'alternative' (read hair-brained) schemes to try to avoid having to sell in order to buy, but have had to come to the hard conclusion that I'm just going to have to wait and hope, like so many others in this situation. My sympathies to your mother, in any case, I really hope they can get the house they want!

They have £40k in cash savings.

If they'll accept my £25k then they'll be looking to find £15k - If they refuse my money then it's £40k

I wondered if they could get a secured loan on the SW house for £15k?

They don't think they'll get a mortgage on either property because of their age/retirement status.

Red-Squirrel_2

NewShadow wrote: »

I'm a little shocked as well

Mum has seen a house she wants to buy - she wants to go in and offer to buy it this week.

The house in South Wales is yet to go on the market and houses in the area move slowly.

They're basically looking for a way to buy the house in Lancashire now and allow the house in SW to sell in it's own good time.

Its not really realistic.

How quickly is the house in Lancashire likely to sell?

They'd be better to get their Welsh place on the market asap at a price that will get a quick sale and then see if the Lancashire one is still available or start looking for others.

There will always be other houses no matter how much they might like this one, and equity release won't be that quick and will come with extra costs for the privilege! Not to mention that they'd have to pay the higher rate of SDLT upfront and reclaim it when they sold the Welsh place.

NewShadow

Thank you.

I'll suggest the mentally consider selling the SW house 'cheap'.

Even if they end up selling for £70k - they have the cash to make up the shortfall and - if this house is 'the one' then surely it's worth it?

Bossypants

My bad, sorry I missed the savings part!

That does potentially make it easier. I don't know about home equity release, but £40k is a relatively small amount for a decent income, it might be worth speaking to a specialist broker just to see if there are any mortgage or loan options available in their position, just in case.

Silvertabby

Hate to throw cold water on this, but has your mum done her research on the new house? A property for £80K in Lancashire won't be in the best of areas.

D_M_E

£40k savings leaves another £40k to find for the house and this will leave them nothing unless they take up your offer.

Other things to pay for will be selling and buying fees - agents' fees to sell and solicitor/conveyancer fees to buy and sell, SDLT if any, moving fees just to name a few and moving from South Wales to Lancs does not come cheap unless you hire a van and do it yourself with a few friends - probably cost a few quid in pies, fish and chips and beer as well as the van costs, and all these incidentals will easily add up to several thousand pounds.