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So my nan who's 82 is a bit strapped for cash, unfortunately one of the two daughters (my aunty) has suggested equity release on her property that she currently owes nothing on. These companies strike me as shysters and when/if I get to stick my oar in I'll make this known. My mum ( the other daughter) is of the same thinking. I'd rather buy the whole thing outright and let her live there but I'd have to charge her rent to cover the mortgage, if I could get one that is and then I suppose I'd be no better than the equity release company!!! Any ideas! Are these companies all shysters??
So, she has an asset that is worth money, and she needs some money?
Shirley you just need to find the "best" way to get at that value, as cash?
Like anything, I believe there are good and bad companies out there who can help, but independent advice would be your way forward.
I'm sure someone will be along shortly, whose response isn't based entirely on opinion and conjecture!
How big is the property? Could she sell and move somewhere smaller, say a flat or apartment? That way she keeps control of her finances without third parties taking their cut.
So she is 82 and short of money despite the pension credit and social security, she want pay for atv licence, or probably council tax.
So why does she need cash.
Perhaps the aunty has suggestede equity release as a way of her getting a cheap loan of her mum, or more sinister, stopping the house having to be sold if the mother goes into a care home, and having hardly anything from the sale.
Had the move discussion before and she just doesn't want to sell, and as its a bungalow shes got no worries about access etc. Prob worth 200k and there's not a penny owed on it. My worry with the release thing is when she does unfortunately die, they control the asset and therefore they sell it for what they see it's worth not giving a toss about anything else.
Project I don't think it's that sinister. Aunty has lived in a council house all her life so has nothing to pass on as such and I just think she sees it as getting quick cash for nan but without thinking of the pitfalls.
As regards pension credit and all that I don't think she qualifies or something, I haven't really got that involved and don't know what she's entitled to as I didn't want to be seen to be interfering.
Ive done a quite a few equity release schemes for clients. I think the ones to be avoided involve the sale and lease back of the house to and from the loan provider i.e your nan sells the house and leases back. Go for one that sits as a mortgage on the property then your nan's executors will retain a greater degree of control on any future sale. Also make sure that the scheme is portable and also covers negative equity situations - where the house when sold is worth less than the debt - some schemes will take the value of the house in full settlement. These schemes are very expensive money and carry hefty penalties if you want to come out of them early - they can also effect entitlement to benefit and assistance with care costs.
Don't know your family's financial situation but why not pay her grocery, council tax and fuel bills between the family - they can't be that much. Surely the cost will be less than what you'd lose on the equity release scheme.
But waht is she going to do with the money then,
you probably think nothing is sinister,but a load of cash affects peoples thinking.
Maybe it's just a case of £25/week or paying just the council tax bill