Equity release ...my sister making my parents do it

Kittykat74

My sister belongs to a local BNI group and she has introduced a member to my parents with a view to releasing equity from their home. 
Now I looked into this last year for them and ran a mile as looked horrific.
My sister and my parents think this bloke is the bee knees.. I however have doubts .. he visited us to understand our financial situation so he could gage how best my parents could help us but a few thing he said concerned me and today I have found out he told my parents we were £70 000 in debt further than we are (the debt we are in is pandemic related and I am now in contact with StepChange to get proper advice) but he told them we had an additional business loan that is not true.
(He also told my sister that my parents could be liable for our Ltd company Bounce Back loan ... she never actually asked me and has just has become a really toxic situation) 
Anyway .. I would just like to know is there really a good reason to do an equity release.. and any suggestions how I tell my parents this is a bad idea..as they think the sun shines out of my sister's..... 
TIA 

theoretica

Equity release can be fine if the person themselves needs the money now rather than caring about how much they or their heirs get when they sell the house. 

It can get complicated if in future they want to downsize.  If they equity release and then give the money away it can raise issues of deprivation of assets if this means they can't afford to pay for care. 

MWT

Kittykat74 said:

... and I am now in contact with StepChange to get proper advice) ...

Another part of StepChange, StepChange Financial Solutions, provides free advice regarding equity release, it may be worth suggesting your parents talk to them as on the one hand it will be free advice, which I suspect the current 'advisor' is probably not providing, and it will be fully independent of any pressure from other family members.

There are good and bad reasons to consider equity release and it is a great solution for some and a very poor one for others, but it should always be entered into on the basis of proper advice and it doesn't sound like that is what they are getting right now if everything you have posted is accurate.

Kittykat74

MWT said:

Kittykat74 said:

... and I am now in contact with StepChange to get proper advice) ...

Another part of StepChange, StepChange Financial Solutions, provides free advice regarding equity release, it may be worth suggesting your parents talk to them as on the one hand it will be free advice, which I suspect the current 'advisor' is probably not providing, and it will be fully independent of any pressure from other family members.

There are good and bad reasons to consider equity release and it is a great solution for some and a very poor one for others, but it should always be entered into on the basis of proper advice and it doesn't sound like that is what they are getting right now if everything you have posted is accurate.

I don't know what he has advised my parents .. but I just felt uncomfortable around things he said to me and the incorrect information he has shared back. He did ask if he could share the information but not my sister who it appears does now have all our financial information .. and I now have that uneasy feeling that this is not the right person to be helping. So definitely I will look into StepChange for my parents too.. thank you 

csgohan4

I would tread carefully and this is a prime example of where money and family shouldn't mix. Sister clearly has her referral bonus in sight and doesn't care about the fall out.

Your debt is no one else's problem, so mentioning it to your parents is bad form especially when you have not given permission to do so

I would definitely engage stepchange and get your parents to seek an independent on this. If they don't need the money, why would they get ER? Assuming you have not asked them for help

however giving out wrong advice in terms of debt liabilities seems like an agenda here and trying to emotionally blackmail your parents in using an unnecessary service

ACG

Equity release has its place. Your circumstances sound quite complex as there appears to be a business involved, although that being said I am not sure why a business/business debt would come into play with a residential mortgage unless it was not being paid. 

There are a lot of questions before saying whether or not equity release is a good idea. My initial thoughts however are if your parents are of an age where equity release is an option, presumably they are not too worried about future borrowing? In which case, I am not sure why they would not just continue with a DMP. Sometimes it can be a pride thing, it may also be that they do not want to have monthly repayments hanging around their neck and equity release would help to remove that. 

Another thought process is that my gran is in a home. To get her in a decent home it is a grand a week. She had some savings and so her savings are being eaten up with that (which is fine as it is her money and we want the best for her), but they will not last. Within the next 18 months her house will need to be sold to continue paying for the care home. If your parents need a care home down the line, they may be stuck witha council home which from what we found were not as good. 

Plenty of things to think about, but there is not enough information to say whether or not it is a good idea, but it seems there are concerns your end and you need to be able to talk them through. Ultimately though it is your parents decision and you do not have to agree with it.