Equity Release

[LINCARE]

Hi , I didn't know which heading to put this under but I'm hoping someone will be able to answer my question . I own my house and my two sons aged 48 and 52 live with me . The 48 yr old is severely disabled so my will states that the house cannot be sold in their life time .
What I am wondering is if I release equity on the house will my sons still be able to carry on living in it ?

[dannyk13]

Yes,but only until your demise at which time the house goes to the lender and your sons would have to find alternative accommodation

[woofgang]

That depends on the terms of the equity release. In the current economic climate, though its not such a good way to raise money as it used to be. lenders used to be able to rely on the increase in value of the house to recover their loan plus interest and leave some of the home value. Sadly this is not usually the case. I can't imagine a lender being willing to wait longer that your death (excuse my bluntness) for the loan to be repaid and remember that the interest will carry on mounting up.

[themas]

This is something you certainly should not do if you want to ensure your disabled son has somewhere to live throughout his life. As already said, the house would almost certainly have to be sold on your death. Even if it wasn't, the interest could continue to rack up & the lender would be bound to have a provision in the contract enabling them to sell at a time of their choosing.

If you do raise money now do it in some other way, but you must be very careful because if you die owing money it will be a debt of your estate. The estate will include your house and it would have to be sold to pay the debt if there was no other way to pay it.

It might be worthwhile you putting the house into a trust. I don't know whether this is feasible - you need specialist advice from a solicitor who is a member of STEP (google it). It will cost you, but could well avoid serious consequences down the line.

[LINCARE]

Thanks very much to you all for your answers . I will certainly NOT be going ahead . It was a nice dream while it lasted ! Lin

[Peter Pedant]

Equity release is an appalling deal
dont go near it !

OK it is a good deal for the lender
but I dont think that that is the point