Has anyone done equity release?

My Mother and Stepfather did equity release in 2017. They had no mortgage and took out the maximum amount possible, which I believe was about £80,000. My brother was a witness and signed the documents and it was a year later that I was told about this decision. As my Mum is 88 and hardly ever goes out at all these days, it appears that my Stepfather has sole control of the money. He did mention recently that the amount available to him is now only about £40,000. Other than that I don't know any details and they all refuse to discuss it with me. My brother just says 'Whats done is done' and its no use crying over spilt milk. I do feel hurt that i wasn't included in any decisions or discussions and I do worry about what will happen if either of them need to go into a home. It would appear that they can't downsize and the money seems to be disappearing rapidly. Apart from my Stepfather buying a new car, I have no idea what it has been spent on. I just wondered what other peoples views are on this situation as it seems to be a rash decision to me, but I am not allowed to have a discussion about it.

We took out a lifetime mortgage to pay for some improvements. We pay interest monthly, so the amount we borrowed never changes.

My friend did this. It paid for a stairlift and she retired two years early so she went on lots of holidays.
She didn’t have any family and she enjoyed herself. This was in the 1990s. Her house couldn’t have appreciated very much being in a depressed Northern town but she was taken on.
It worked for her.

My mum wanted a lump sum for work on the house after my dad died so we looked at all options and she took out an interest only mortgage with easily affordable monthly interest payments.

This has worked well for her and although money owed to BS doesn't decrease, the value of the house has, over the years. She is happy with this.

Quite a few Building Societies will lend to older people providing they can afford the interest payments.

Not all future control at all.

Regardless, I'd never take out any of these products. Basically you are ceding all future control to a third party. Having spent all one's working life paying off a mortgage, why start having another one? You can never completely foresee your future. We thought we'd never move again, but we did to be near our family. We managed to release quite a bit of equity on moving - not downshifting as such - but it was a much cheaper area so our money went a lot further. I wonder what will happen now, if the property market nosedives, as some are predicting? Your equity could be wiped out completely.

There is difference between the old Equity Release and a Lifetime Mortgage.

You can pay off the interest on a life time mortgage and only owe the principle. People decrying them are not up to date with the modern products.

love books
I agree with you whole heartedly, having had a relative in a similar situation. Equity Release drove her into having a nervous break down
These companies are so good at selling these things, making them sound like the answer to all your problems. My experience is, they are a cause to most of your problems, and your children's once you are gone. Nothing short of a scam. Don't go there!!

Grannyguitar have they enquired whether they can simply move the debt to another house?

Thats only possible if you also have savings to cover the moving costs.

If you dont you need to use equity to pay the moving expenses/fees

Grannyguitar have they enquired whether they can simply move the debt to another house?
That should be possible.

Some friends of mine did it some years back, and now regret it. They are stuck in a large house, a fair walk from town and would like to come nearer to town in a more manageable house. Impossible, as the remaining equity in their house, after paying off the debt, would not leave enough to do this. Yes, they have used the money to finance a better lifestyle, but now feel it was a bad mistake to make.

I took £36 000 of equity out of my house to build an extension on to make it disability friendly, the interest is added to what you borrow - you pay nothing back until you go into care or die. It suited my purposes and you cannot have negative amounts, but may leave nothing when you die.

We took out a Lifetime Mortgage with Legal and General last year at 1.9% interest. We pay the interest monthly so that we will only owe the capital sum if and when we cash in, go in to a home or die. We can pay off at any time and will only pay a bit more than we owe if interest rates go even lower, which they have for now but they will increase again. When they are higher it will benefit Legal and General to let us pay off the money to give to someone else at a higher rate. Of course we'd only do this if we won the money or sold up and down sized. We can also continue the arrangement if the new property is of suitable value. We are very happy with our deal and have been able to get some work done on the house and buy a few lovely things to make home even better to live in. Please pm me if you want further detail and I'll try to help.

Look out for maintenance clauses too

merlin it sounds as if your situation is very similar to ours.

Don't particularly want or need to do home improvements (apart from getting the quite small garden sorted) just want to be able to stay in this house.

Just to add, only the amount we borrowed will come off the house sale when we die so we know the exact amount.

Find a well recommended mortgage broker and they will explore the best option for you. We took out a small Retirement Interest Only mortgage to enable us to carry out internal changes to our new home. A good broker will guide you through it and get the best product and deal on the market for your circumstances. Our fee was £200 and was worth every penny.

It’s not something to be entered into lightly. My sister and BIL did it, and when I had to sell their house when they died (I was the executor), it was very difficult. However, things may have changed now, but research is throughly recommended.

I would avoid unless absolutely necessary.

The sector is much better regulated now so at least the information is out there.

A lifetime mortgage may be a better option if you can afford it.

Would second Money Saving Expert as a source of information.

We did it because our mortgage was due to be repaid and a second loan was high. We took out £80,000 on a £240,000 house and I was surprised when we got our first annual statement which shows a £9,000 addition of interest. I think it's ok if you pay something off each month, which I will do this year to avoid the equity being eaten away, but if you leave it there won't be much left to pass on. We can't downsize really because we have adaptations for disabled hubby who needs the space.

MIL did this and borrowed a percentage of the property valuation e.g. 10% then when she died they took 10%. Seemed fairer way of doing it

She must have repaid interest before she died because you pay back more than you borrow.

Even the ads groom people against listening to concerns

"Good" relatives saying "we want you to do it because we're not greedy"

As said upthread. These days most people are OLD themselves by the time they inherit so have already had to find their own way to have a family home. Nobody is waiting for inheritances to make plans because you could be waiting until youre retired yourself.

In the case of my relatives, they werent all that settled where they were. They often toyed with moving to another area. It was an older property that is hard to maintain and there are maintenance clauses in the contracts. It wont suit them if they become less mobile because of the awkward lay out. Its not a good area to live in once they can no longer drive.

But they had been so primed by the reps that our scepticism was brushed off as veiled inheritance concerns.

Bearing in mind that we are all well into middle age, all home owners, and all have nearly grown children... we're not exactly looking round their place with pound signs in our eyes!

MIL did this and borrowed a percentage of the property valuation e.g. 10% then when she died they took 10%. Seemed fairer way of doing it

I hate the way equity release companies imply that if your family is supportive its because theyre not greedy and arent after your inheritance, and if theyre sceptical they need to be told that you need to enjoy your life not just live to preserve inheritance

We had that issue when a family member looked into equity release and we were concerned because their property was not adaptable and we worried that it wouldnt work for them long term and they needed to have money to move to somewhere more accessible if they got frailer.

It was reframed as us not wanting to spend money on enjoying their lives. The companies they spoke to were very very clever. Lots of stories about people with NICE SUPPORTIVE relatives Vs bad boo greedy relatives. They primed our relative so that by the time we aired our concerns (when asked!) they were convinced we were worried about inhetitance.

We werent. We were worried that their property wouldnt adapt as they grew and they could end up trapped there finding it difficult to move.

The thing is no one is entitled to inheritance. My children told us that if we wanted to to go ahead. Remember they will most likely be in their 50s to 70s when we die. Not children.