Equity Release

lanerose60

Not sure if anyone can help, my elderly mother took out equity release on her property many years ago, we are really worried about the debt she has built up, but she is evasive and gets upset if we bring the subject up. We are just worried that she will end up losing more than her property is worth. She has said in the past that there is a maximum debt of £125000, can this be true or will the debt get larger?

Brie

I don't think the amount can exceed the value of the property but early version of ER were pretty dodgy.  it will depend completely on when mom the policy out and what the exact T&Cs are of course.  

Have you tried to ring the company involved (if you know it) to ask about the situation generally?  I doubt they will give any info about your mom's situation specifically due to data protection.  

Keep_pedalling

Why pressure her on this? The loan won’t need to be paid back until her death or if she moves out before then on the sale of the house. The loan can’t exceed the value of the house and hopefully the cash she got has made her life somewhat more comfortable over the years. 

sammyjammy

If she doesn't want to discuss it then its none of your business.

silvercar

lanerose60 said:

Not sure if anyone can help, my elderly mother took out equity release on her property many years ago, we are really worried about the debt she has built up, but she is evasive and gets upset if we bring the subject up. We are just worried that she will end up losing more than her property is worth. She has said in the past that there is a maximum debt of £125000, can this be true or will the debt get larger?

She may be thinking that the maximum debt is what the property was worth at the time, whereas the actual maximum is what the property sells for. A very long time ago debts could outvalue the property but that was stopped a while back.

Flugelhorn

If OP is concerned that the debt will be greater than the value of the property it is worth noting that the estate would then be insolvent - the debt would not have to be paid by family 

silvercar

Flugelhorn said:

If OP is concerned that the debt will be greater than the value of the property it is worth noting that the estate would then be insolvent - the debt would not have to be paid by family 

Unless this a loan dating back to the 70s, the maximum debt is restricted to the value of the property.