Dissuading father- Equity release

Sausmeister

Since my mum passed, my father had been struggling financially.

He lives in a 4 bed house close to a London Underground station. The place is a state and in dire need of massive investment for refurbishment, but still given the location and size of the property it’s worth a lot of money still.

Hi lives with my sister who has had mental health problems for many years and her son who has undiagnosed problems, is 19 years old and neither work nor contribute to the bills.

Dad is really broke! And on Thursday he has a second meeting with an equity release parasite/salesman.

I have been invited to the meeting and with to dissuade him from this lazy and foolish option. He has said for years he would live to go live in the countryside, so I would like to help him sell his place and move away. The two dependants he has who would want to go with him are an excuse he uses to not do anything, but now he is looking at equity release, I have to poke my nose in and try to help him explore other better (for everyone) options. I have two small children and am not in a great position so goes without saying I have a very vested interest in helping dad avoid this course of acton.

So my question is; can anyone suggest an appropriate line of questioning which will help expose the foolishness of equity release?

And other than the obvious, “sell up and move somewhere cheaper strategy”, which I do intend to push with, and offer my undivided assistance toward, can anyone suggest any other strategies which would help dad financially but also avoid the desperate equity release??

He is 79 but in great health, drives, independent and with help is capable of any number of alternative choices, but appears lazily and selfishly set on the easy but dumb option of giving up his ownership of a prime property for a pittence!!!

Appreciate any thoughts anyone can offer

mjm3346

One thing that sticks out are the other people living there

Equity release may not be suitable if you have dependants living with you. Any dependants should take separate legal advice. If they wish to remain living with you in the property, they may need to sign a waiver confirming that they understand they don’t have the right to reside there if you die or move into permanent residential care.

https://www.ageuk.org.uk/information-advice/money-legal/income-tax/equity-release/

Blackbeard_of_Perranporth

Kick his sister out and her lazy son.

Decorate the place.

Sell up.

Move to Mablethorpe. Enjoy.

mjm3346

There was an MSE article a few weeks ago

https://www.moneysavingexpert.com/mortgages/equity-release/

Sausmeister

Yeah, getting his daughter and grandson to move out and take care of themselves is the obvious first step, but he hasn’t done it up until now, this option appeals to him cause it means he doesn’t have to force them out while he’s alive, so appeals to his own lazy and cowardly nature.

But yeah, kick them out and sell makes perfect sense. No point in even decorating, place is a state and needs 60-70k spend on it. All he needs to do is hire a few skips to clear it out and he’s good to go.

Will check those articles now, meeting is later this week. Want to be prepared to expose this equity salesman for the predator that he is, and will also speak to an estate agent first too so that dad has all the info he needs on selling the place. Wanna smoothly transition his focus from the lazy and stupid current plan to a nice sensible positive way to start over in a new place with £££ in the bank!!!!

tacpot12

mjm3346's advice is the best argument against equity release.

I think you should try to persuade your father to think not about his immediate money needs, but what will happen to your sister and her son when he dies. He is 79 and will be aware that his mortality.

Suggest to him that you both look at planning what can be provided for your sister and her son when he passes. You and he need to factor in that the benefits system will not help people who have significant savings or assets that could be sold.

Equity release could be a sensible choice, as it would provide money to renovate the property, which would increase its value. The Equity Release company would required that the property was maintained going forward, which would maximise the value remaining in the property which would benefit both them and the family. It would also mean that your father has money for food, heating and clothes.

The other argument about buying from this specific company is that your Dad is choosing from a field of one! You could suggest that you would help by reviewing all the other providers to see if you can get him better terms and rates. You could suggest that this might prevent him from making a mistake that affects your sister badly.

You might also review with your father what happens about caring for your sister when he dies. If he is currently an appointee for her benefits, you could agree that you will take on this role when he passes. You might also usefully suggest (and push the idea) that now would be a good time for him to make a Power of Attorney so that if anything happens to him, you can look after him and his finances. He and you need to be aware that the one thing you can't do via a Power of Attorney is support your sister if this is not in your father's best interests - it will be difficult to argue that providing any support to your sister or her son is in his best interests, unless she provides some care to him.

Your really need to persuade him that you have his and your sister's best interest as heart. This does not come out from your post as strongly as you might think.

Exodi

Sausmeister wrote: »

So my question is; can anyone suggest an appropriate line of questioning which will help expose the foolishness of equity release?

Sausmeister wrote: »

Want to be prepared to expose this equity salesman for the predator that he is

Firstly, I would get the idea out of your head that you will be able to 'expose' this equity release salesman. With all due respect, the majority of his day is spent convincing people why equity release is a good idea and countering their objections - it's his job. It's most likely you'll fire off several questions which he skilfully answers, cementing your fathers impressions that equity release is a good idea.

Realistically, you need to convince your dad. The fact you have vested interests may make this an uphill battle with him.

ValP28

I agree with others suggestions....kick the relatives out then sell up and downsize with £££s in the bank. My parents took equity release out in 2002 and it was a BIG MISTAKE!!! They borrowed under £60k, the interest owed on top of that is over £100k and if we want to pay it off, Aviva want to charge us an additional £28k early repayment fee!! It's a racket and just another way for big companies to rip people off...!!! Tell him our story and maybe he will see sense and change his mind. Good luck!

fwor

As Exodi says, don't think for a minute that you will walk all over the salesman at the meeting. Unless you are lucky and he's very bad at his job, he will adapt his tactics to you and your father, and he will probably be targeting hopes, fears and divisions, rather than using facts.

My advice would be to sit and listen, and then discuss your concerns with your Dad after the meeting.

And you need to understand your Dad's point of view, rather than just labelling him as lazy and cowardly. Try to put yourself in his position and think what he thinks is important (rather than what you think is important). If you continue with your current "I know best" approach, the salesman will just work on driving a wedge between the two of you - though of course if he is any good he will be very very nice while he does it.

Robin9

Do have a look at his finances if you can. State Pension/Pension Credits/ Utilities/Insurances.

Probably selling up and moving to Mablethorpe or whatever his dream is would leave enough money to buy a 2nd property for daughter/grandson

macman

Equity Release might be a very good option for him, it's impossible to know without full information. But it clearly wouldn't be a good option for you and your siblings, who presumably are his eventual beneficiaries.
So don't delude yourself that his interests are identical to yours. The salesman wants to maximise his profit and commission. You want to maximise your inheritance. You may have more in common than you think.