Equity release redemption

Adyrob

Hello, newbie here. I have a concern with an equity release company. My father- in- law passed away in November, he had an equity release plan on his home to pay for the carers he needed. My wife through probate now owns the bungalow, and obviously the equity release plan. we have a redemption figure coming to us from this company, who took way too long in supplying it but boosted their interest received from us by another couple of months anyway, and which lasts for 24- hours only, and now my wife is very anxious about how we go about paying what would be approximately £78k to the company who don't really contact and communicate very well. Does anyone have any advice in paying this figure securely and with confidence? thanks in advance Adyrob

Thrugelmir

Adyrob said:

 My wife through probate now owns the bungalow, and obviously the equity release plan. 

Check the small print. Highly likely that the loan is repayable on death. The estate of the deceased remains liable for the debt not the beneficiaries.  Selling the property is the obvious way of discharging the debt. Which will continue to accrue interest the longer it remains unsettled.

Adyrob

Thanks for the reply. We’ve recently sold our house and was using some of the equity from that to pay the debt off; whilst he was physically disabled he had mental capacity so it was always very difficult to get him to agree to things, he very much had his own mind. Now that he is no longer with us we have a bungalow that requires modernising and so we thought let’s pay off the equity release debt then set too and make it sellable

Linton

Adyrob said:

Thanks for the reply. We’ve recently sold our house and was using some of the equity from that to pay the debt off; whilst he was physically disabled he had mental capacity so it was always very difficult to get him to agree to things, he very much had his own mind. Now that he is no longer with us we have a bungalow that requires modernising and so we thought let’s pay off the equity release debt then set too and make it sellable

You may well find that the cost of modernising the house will outweigh the gain on selling price.  Unless you have house renovation skills and the time to do the work perhaps you should consider selling it in its current state and paying of the ER asap in that way.  This would remove major hassle. 

MWT

Adyrob said:

My wife through probate now owns the bungalow, and obviously the equity release plan. we have a redemption figure coming to us from this company, who took way too long in supplying it but boosted their interest received from us by another couple of months anyway, and which lasts for 24- hours only...

The interest accrues daily so the figure is only valid as at the date they specify, but it is not uncommon to state how much it increases by per day for example.

There will be a charge on the property so although it may be going to your wife once the estate is settled, it cannot have been transferred yet without settling the balance on the loan.

The only real question at this point is can the debt be settled without selling the property, if it can then your plans to renovate are an option, if it can't then the estate will have to sell the property to clear the debt.