equity release

Rather than equity release sell your present home and move somewhere smaller then divide any surplus amongst your children if you want to help them.

Finance companies are there to make money not help you.

David,Not everyone has a house valuable enough for downsizing to be practical. In many parts of the country, especially the north a 3 bed terrace house may be worth well below £200k, or even £100k.

It is the owners of these houses who most benefit from equity release. Others do it because they do not want to move, just make their existing home more age proof. There are many reasons for equity release, helping children is just one of them, but of course, advertisers pick on that as it is so emotive.

Another side of the story is that anyone on a Debt Relief Plan..are often given advise on Equity Release!

If they think you are unable to pay off any debts you have before a certain period,they can suggest Equity Release if you have plenty of Equity.

But!! this would be wrong to do in my eyes, as although yes! you would clear your debts, you would then be left with a lifetime mortgage or what ever plan you would take. which then would mean you would be in further debt as you are unable to pay back any money.

The other advantage of equity release, if your house is valuable, is that it enables you to give large sums of money to our children when there is a good chance you will survive 7 years to make it clear of inheritance tax so that when you die your estate is less valuable and less tax is due.

A friend with a very valuable house in London (not when she bought it) has used equity release to buy both of her children their first home and more or less taken her estate out of inheritance tax, when it would otherwise have been liable for a lot of tax.

If anyone is considering Equity Release do avoid Age Partnership because you'll never get rid of them! I managed to stop the phone calls by telling them we'd used another company but the letters still turn up !!!

It will also impact if she needs care. Social services will refuse to pay (and rightly so) otherwise everybody would just release the equity, spend it and expect the government to pay for them. (Sat 13-Jul-19 00:09:22) trooper7133

The above is not entirely accurate.

The council looks for deliberate deprivation of capital so it will depend on how long ago your mother took out the mortgage as much as anything.

If your mother goes into care you will have to sell the house within a specific period both the satisfy the Equity Release contract and also to satisfy the Local Authority(LA) conditions. If she needs care you need someone to explain it to you as it is all quite complex. LAs can be very helpful. Do not assume anything - certainly not that they will not pay. There is always a chance that it is not as bad as you think.

For those who have explored all other options then it can be a good idea. Of course downsizing is always an option to release cash, but lots of people are perfectly happy where they are, so this is where equity release can help.

Most of us are now in possession of property which has rocketed in value over the past few years especially here in the south, so why not take advantage of that?

Schemes nowadays have a lot of flexibility in that it's possible to pay the interest per month to prevent the debt building up, or not - it's up to you.

Another thing to remember is that a lot of us unwittingly have fallen, or will fall, into the dreaded inheritance tax liability, so when we go, our children will have a big tax bill to pay.

Why not make use of the increased value in your home rather than letting the taxman get it when you die?