Equity Release Query

AnotherJoe

Spreadsheetman wrote: »

It would be if they bought under market value.

First i dont see how they can do that for two reaons.
Aviva wont let them sell the house for a fiver or they would lose out.
If Aviva dont care what its sold at as long as they get their money back, if they did sell the house for say £130k when its worth £150k they still have to find £20k to pay Aviva.


Bottom line, The MiL has no equity in the hosue so theres no deprivation possible.

They might be able to deprive Aviva.

Onebar

kidmugsy wrote: »

They rented the money and they rolled up the rent. Eventually the debt must be paid, in whole or in part. They've had 13 years of use of the money. Are you alleging that Aviva has diddled them? Are you claiming that they were too stupid, or too ill, to be trusted with making their own financial decisions, and that Aviva should have diagnosed that?



I dare say some people think they'll take the money from Aviva and hope that many years later political pressure will be brought to rob the Aviva shareholders of what is rightfully theirs.

Sounds very much like you're an Aviva shareholder Kidmugsey! ...firstly I have not inferred anywhere that the debt or interest on the debt shouldn't be repaid, nor have they been diddled. I also take exception to inferences that they were too stupid or ill to make their own financial decisions, clearly unlike your good self they lacked a certain amount of financial astuteness, it doesn't make them stupid as not everyone has the same level of monetary savvy, they are/were also from a generation where asking their children for assistance or guidance was basically not an option.
My post was to enquire what the options were if any, thankfully others have responded in a constructive and civil manner.

kidmugsy

Onebar wrote: »

I also take exception to inferences that they were too stupid or ill to make their own financial decision

You are the one who implied they'd made a foolish decision.

I have no idea whether their decision was wise - it may well have been - but I do know that they were grown-ups and so are assumed to have capacity to sign a contract. Then they have to honour it, a prospect you seemed to find unappealing.

Alexland

Using a compound interest calculator it sounds like Aviva have made an 8% annual return on their loan which isn't bad considering it was taken out before the financial crisis that unexpectedly pushed rates to rock bottom for the past decade. If rates had gone up for a decade they would have also needed to honour the deal?

At the time I remember my mortgage rate was around 6%

Alex

Disclosure - we have money invested with Aviva which include their property investments.

Vm2422

Firstly, sorry you find yourself in such a sad scenario regarding your recent bereavement.
Finding ourselves in a similar situation recently, we took both independent legal and mortgage advice. We did subsequently purchase our relatives home, which had a small amount of equity remaining until it reached the market value.
We were swiftly informed that the purchase price is determined by the mortgage survey, thankfully this wasn’t too far out of our estimations.
Additionally, There are a few banks which do mortgages ‘for family members’.
Be aware that stamp duty will count if it’s a second property, even if it’s not buy to let.
We also completed a subject access request and I too agree with your sentiment; that the full extent of the long term impact was not fully made clear- by comparison of today’s standards, but maybe companies learnt something from the financial crash after all.
Even with the legal advice we received, we were made aware of the possibility of having to contribute to care costs- but different local authorities have different thresholds for this and they can change dependant on need- thus hard to plan for.
Additionally clarify with Aviva as to whether there was a guarantee to ensure no negative equity is made, its my understand that many schemes did sign up to this.
Best of luck, it’s not an easy decision to make.

AnotherJoe

Vm2422, why did you buy their home ?

Alibert

Going back to the OP
The maximum amount that has to be paid is the value of the house , so if the debt is pretty much already , just leave it and continue to live in the house effectively for free

Use your 150k to buy a different house .. if you want one, and rent it out