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Legal & money

Considering equity release

(9 Posts)
Rosiebee Wed 10-Apr-19 17:12:42

DS has been going through a very acrimonious divorce for 2 years. The sticking point is finances. He is at the end of his tether and is considering taking out a loan [NOOOOO] to fund going to court to get it sorted out. He is already stretched to the limit as he is still paying all bills etc. DH and I are desperate that he doesn't get into debt and are thinking of taking some money out of house to help him but have no idea what is involved. He is our sole beneficiary anyway. We will seek financial advice before we discuss it with him but would appreciate any input from anyone who has released money in this way. It might be about £10,000.

JenniferEccles Wed 10-Apr-19 17:30:01

Well you could go down the equity release route Rosiebee but as you said you would need to thoroughly look into it. Key Retirement is a good reputable company who would be able to advise you with no pushy salesmen or obligation to go ahead with it if you felt it wasn't right for you.

It can work for some as of course house prices have rocketed over the years and most of us have got a fair bit of equity built up in our properties.

However as you are only talking about a fairly small amount of money, a bank loan may work out cheaper for you especially if you envisage being able to pay it back reasonably quickly.

Although you can pay the interest, or 10% of the loan p.a. with equity release, the idea is to let the debt build up and be settled at the end of the term, ie when you pass away or go into a care home. If you don't pay the interest each year it is compounded, although, again, you are talking about a small amount.

We have done it, mainly to avoid inheritance tax for our offspring, but everyone's situation is different.

EllanVannin Wed 10-Apr-19 17:34:10

A bank loan is your best bet, not equity release( don't even think about that ).

paddyann Wed 10-Apr-19 19:39:20

I'd agree a bank loan makes more sense ,it can be secured on your home if necessary but for that amount I dont think they would ask for it to be secured .

M0nica Wed 10-Apr-19 21:05:52

I doubt you could get equity release for as little as £10,000. There is usually a minimum amount of £20,000 or more.

LadyGracie Wed 10-Apr-19 22:09:04

We’ve taken £20,000 equity release with Legal and General, we wanted to build an extra room on our bungalow, we pay £65 a month interest.

jeanie99 Wed 10-Apr-19 22:33:58

Could you take out a small mortgage on your property it could be cheaper than a bank loan.

FlexibleFriend Wed 10-Apr-19 22:43:17

He could get a zero interest credit card for that amount. I put all my divorce fees on a credit card as I didn't have any funds at the time to finance it. I'm still paying them off at zero percent. As the deal comes to an end I transfer it to a different zero percent card. It's nearly paid off. I think equity release to add to your property makes sense but not for anything else.

Rosiebee Fri 12-Apr-19 19:15:34

Thanks for replies. It's made us think a lot more about it. It's not as straightforward as I thought it might be.