Advice please

Twinny99

I wondered if the collection of experts could help me please? My mum owned her house outright, then remarried and obtained 2x of equity release which currently has £59k outstanding. Marriage broke down and she now has to pay ex-husband £70k. She is 74 and can get a new equity release / lifetime mortgage for £140k which will cover the old loan, what she needs to pay ex-husband and the £11k she owes me for legal fees but the interest would probably take all the remaining equity in the house. She might want to downsize or might need nursing care in the future. Or I could pay what she owes husband and then still inherit something when she passes away? But that wouldn’t leave me with much and I’d like to buy a house myself one day? I just don’t know what’s best - am tempted to just let go any thoughts of a future inheritance and let her obtain the equity release as it seems the cleanest way. Or I could pay husband off and put my name on her house as joint owner? 

Sorry for long post but I hoped someone on here might be able to advise me?

Keep_pedalling

How has this financial settlement come about? Has her ex no financial assets that she might have a claim on to offset the claim on her home (savings, pensions ect.) ? How long were they married? Did he financially contribute to the house in any way? 

PS. I think this would be better on the Marriage, relationships & families board so I have asked for it to be moved. 

Alderbank

You aren't really sharing enough information here to give much useful advice. For example, you don't say the current value or condition of mum's house or tell us how you have invested the £70,000.

But for starters, how much is that £70K currently earning? Equity release schemes vary but currently cost about 6%, so unless your investment is returning more than 6% after tax you would be better using it to pay off the ex.

Linton

I think your assumptions are wrong - the reason is that if a new equity release used up all the equity in the house before you mum reached extreme old age the ER company could well lose money. At 74 I guess she may be able to get  about 30-40% of the value of the house in total ER. How much is the house worth?

I also suggest that you try to avoid getting your finances tied in with hers.  For example I believe becoming a joint owner of her house would mean you pay higher rate stamp duty should you buy one of your own.  It would also mean that your equity is not accessible until the house is sold. 

In any case, you becoming a joint owner would require that the ER is paid off presumably leaving nothing for the ex husband. The ER company must be certain of getting their money back when Mum no longer needs it.

Perhaps Mum could discuss the options with an ER broker/advisor.