Buying back an equity release home

nanapoo

Hi just wondering if anyone can answer our questions with regard to paying off the interest on an equity release taken approx 15 years ago? My partner's parents signed over their house and his mother still lives in the property until such time as she passes or has to go into care.  Due to retirement he is now in a position to pay off the loan and buy back the house but obviously needs to protect his hard earned pension. So our question is:
Can the property be transferred to him after he pays off the loan or does it have to go back to being in his mother's name? Therefore risking losing it again to pay for care! 
Sorry it's a long one, thank you in advance for any advice /suggestions. 

ciderboy2009

The property can be transferred to him at any time.  However, unless the amount it is costing to pay off the equity release is the full value of the property then it is likely to be seen as deprivation of assets if his mother does nees care.

He would also have to consider stamp duty (possibly the 3% enhanced amount) and requirements as a landlord (as this is what he would become).

Linton

There are two types of "equity release".  One is home reversion where the company buy your house at a very low price and then allow you to live in it until death.  The other is a form of interest only mortgage where the interest may be added to the loan or paid directly.  In the mortgage case you continue to own the house but there is a debt which must be paid when the house is sold.  The debt is norrmally limited to the then value of the house.

So you need to find out exactly what the equity release  is.  It sounds more like a mortgage in which case it may well be possible for the capital to be paid off.  However there could be charges for early redemption.  It should all be specified in the documentation supplied when the equity release was taken out, but if that isnt available I suggest your father-in-law talks to the company concerned.

PS in these circumstances paying off the equity release would not affect ownership.  In the case of home reversion one would pay, presumably, the full market price to buy the house off the lender.

nanapoo

ciderboy2009 said:

The property can be transferred to him at any time.  However, unless the amount it is costing to pay off the equity release is the full value of the property then it is likely to be seen as deprivation of assets if his mother does nees care.

He would also have to consider stamp duty (possibly the 3% enhanced amount) and requirements as a landlord (as this is what he would become).

Thank you very much, something we hadn't thought of!

nanapoo

Linton said:

There are two types of "equity release".  One is home reversion where the company buy your house at a very low price and then allow you to live in it until death.  The other is a form of interest only mortgage where the interest may be added to the loan or paid directly.  In the mortgage case you continue to own the house but there is a debt which must be paid when the house is sold.  The debt is norrmally limited to the then value of the house.

So you need to find out exactly what the equity release  is.  It sounds more like a mortgage in which case it may well be possible for the capital to be paid off.  However there could be charges for early redemption.  It should all be specified in the documentation supplied when the equity release was taken out, but if that isnt available I suggest your father-in-law talks to the company concerned.

PS in these circumstances paying off the equity release would not affect ownership.  In the case of home reversion one would pay, presumably, the full market price to buy the house off the lender.

Thank you Linton. We believe it is the mortgage type and there are early redemption fees of about £11000 for admin! Thank you for your time