My grandad completely forgot he took out a lifetime mortgage

But what if you did need to though?

This is usually people in their 60s doing it and they’re essentially making a decision then (and possibly not realising it) that they’re never downsizing, never moving to be closer to family or never moving into a bungalow or more suitable property as their mobility decreases.

A lot can change over 20-30 years and you don’t know for sure that it won’t be in your best interests to buy a different property as you get older.

I thought the same. He probably got a lump sum. If it was a mortgage there would have been records of repayments on his bank account. With equity release no repayments.

A lot of older people see passing on a home as passing on a legacy for their family. His son is dead and you're all he has left, and he can't pass you a house.

I think it would be good to focus on what he can leave you - his love, his memories, his knowledge. You could spend some time with him, interviewing him on tape so you can pull together a special 'family book'.

No one in my family makes it to 90. At 90, he must have some stories to tell.

You just have to reframe what legacy means, why it's important and how he hasn't let you down. Having lost your father, you know - hell, you both know - how important time is. Your grandfather has given you lots of that.

Most of us would give any money away for more time with our loved ones. I suspect both you and your grandfather can understand that. You both know what it's like to not have 'enough' time with the people you love.

On a positive note if he has to go into a care home he will not be expected to pay fees from the sale of his home?
It is worrying though a lot of older people have poor memories and I can see how they could be scammed with this. As others have said make sure you find all the paperwork.

The only ones that lose out are the ones who might inherit.
No, I disagree, often the intention is to still leave a substantial amount to the children or family. Not fritter ones life savings away.
As in this case Grandpa is distraught that he has nothing to hand on to his loved ones.

When did he take it out OP?

Hi OP, having had two very elderly parents to deal with. Please take a deep breath. Although LPA takes weeks I was given a General POA through a solicitor who assessed my DF. It was usable immediately. This was five years ago so things might have changed but jolly useful it was too! Had no issues touting it around the various financial institutions.

Be really firm here. I am going to be somewhat harsh but grab this by the balls and run with it. Your DGF is 90. He is not mentally all there. Accept this and move on. Don’t waste any oxygen trying to find out whether he remembers or not. He is embarrassed and could well fib about what he remembers or not.

You need to find out the facts. He can fund you and he going to a solicitor and getting an immediate POA so that you can then register it and find out what has really gone on. Don’t be surprised if you have only been given half a story. One of the financial institutions got the police out when my DF made some statements about what he could and couldn’t remember. In the end it was a mixture of embarrassment and dementia but it took a number of weeks to get to the bottom of everything,

People are allowed to make poor decisions. How many times was I told this by various institutions and social services.

Until you have all the facts you are relying on a 90 year old to brief you.

If the equity release was taken out over 20 years ago and no payment was made in that time, then yes it will be massive and more than likely take most if not all of the remaining equity.
Sadly that’s how equity release works. We took out equity release about 5 years ago to cover some debts and help children out.
We tried our best to make payments that atleast covered the interest that was added every month… but it became impossible. We realised quite quickly that in 30 odd years time, the amount outstanding would take all the equity in our house and there would be nothing left for our children.
we made the difficult decision to sell our house while we still had enough equity left to be able to buy ourselves a small flat.
in your grandad’s case, can you contact the lenders and try and find the original paperwork?
I wonder if he really understood what he was taking on?
it was very clearly explained to us but it might’ve been different 20 years ago.
im so sorry he has found himself in this position.
All you can do is reassure him that your only concern is his happiness and health and that he shouldn’t feel guilty if he doesn’t have an inheritance to leave you. Xxx

My Dad and his partner took out equity release back in 2007 for £15Ks worth of double glazing. No issue with his faculties generally back then. Roll forward to last year and on selling their house that £15K had changed into £55K - the joys of compound interest.
Thing is they had the cash to just buy the windows straight off but didn't want to eat into their rainy day nest egg, at least that's the most rational explanation we've had. Back then Dad would often ask advice but sadly not on this occasion. We did have our solicitor look into it but it was 'tighter than a ducks arse' it seems.

Why?

It's fully explained and the homeowner's decision

The only ones that lose out are the ones who might inherit.

I think equity release will be the next financial scandal.

It's a charge put on the property but only payable when the house is sold either on death or moving into a care home.

I'd have more sympathy if he hadn't been setting aside the correspondence. Perhaps if he'd read the statements he'd be in better shape now.

These equity release schemes, what you have to remember is that interest and fees are high because they do have to cover situations where the homeowner lives a long life. The bank has no idea what state the house will be in when they finally take it over. What its value will be, what repairs/remediation might be necessary to make it saleable, etc.

Equity release can be quite useful especially for unmarried people who don't have to worry about jeopardizing a spouse's dwelling, but they are costly, for good reason.

My late FIL did an equity release, it was quite a normal process 20 odd years ago I believe. I did a huge amount of boring research when we found out about it too.

The basic premis of them is that you don't repay it as you would a mortgage with a monthly amount. They are designed to tick away in the background and be settled by the estate upon the person's death or when the property is sold to fund care fees for example.

The issue being that as interest rates have risen and people live longer you often end up owing far more than was projected at the time it was done.

So ultimately your grandad hasn't done anything wrong. They were sold on the basis you took it out and forgot about it.

That said it is worth doing a SAR on it to find out the exact terms etc as he may have a claim for it being missold.

But far more important is to reassure him that he is absolutely not a failure and it has allowed him to live the life he has had and that is all that matters!

Hope he is ok

I know you don't need a reason, but I would question the motive of people doing this to get their hands on their inheritance

Thats why you need permission from the person or a POA.

That said, a SAR is just all the data they are processing or have processed about a person. That alone wont entitle you to anything. Eg If the company acted legally in granting the equity request then noone will get anything from it.

For the OP however, it might shed light on what amount was lent, and when, and the interest rate accrual etc

I think this can happen in that even though it is explained at the outset of taking out equity release the focus is more on the present and being given some money.

Documents are presented that show the interest rate and what it can add up to, but like all terms and conditions sometimes they are not as "interesting" to fully read and digest. Though the reverse is true. They are the crucial part.

Also people can be a bit head in the sand over things in the distant future and just deal in the present. So the money is handed over. The money is then spent on various things like a nice new car, some day to day money topping up a pension etc.

And in all honesty the Grandfather has been very head in the sand when receiving financial statements and ignoring them / not reading them properly / putting them in a drawer etc.

Then he is confronted with the facts of actions which have come to pass, which were in the terms and conditions right at the outset which were agreed and signed. He may well have just skimmed over say £20k money release at 4% interest for life = £XX in 10 years, £XX in 15 years etc.

Now he is older, his memory not as it was before, his actions of 20 years ago not as clear etc. etc.

At the risk of repeating what has already been suggested, I was distracted by some unnecessary "not nice" comments.
Do you have a formal Power of Attorney for his finance? If not I think you should get one.
You will need to have full details of the account and if there was any legal third party involved, perhaps giving advice.
You need to request contact with the company involved. Do you recognise the name? Are they a bank or linked to a brand that has a reputation.
I assume you have checked on the value of the property, have any nearby been sold recently, Rightmove has the details.

You should be able to rescue some value. All may not be lost.

Wouldn’t they have repossessed his home? Or is it different with lifetime mortgages?

Yes jealous is completely the wrong word.

My D dad took out a lifetime mortgage in his 70s, and he hid the statements. We had got wind of it, but he was an adult in sound mind. Leading up to getting the money, he'd had a girlfriend who may have allievated him of quite a lot of savings, and then there was a caravan... dad just wanted the comfort of a wedge of cash when she was no longer on the scene. In the end, he borrowed about £28k and it cost the estate £150k when he died at aged 83. Two further things, the interest is much more than 4%, and a 'lifetime' mortgage is a misnomer. The interest carries on mounting up after death - in our case, a further 12 months' worth until the house was sold.
Daytime TV is full of ads for these kinds of financial products.

Check the requirements of this loan. I seem to recall that some are advertised as being repayable if/when the person goes into residential care. So then he would struggle to pay for his care.

Equity release has been around for a long time and if for example, he took out a loan via equity release in his late 60's (or perhaps Granny did if she was around then) the high interest rates will have exceeded the total value of the house especially as he has lived in to his 90's. If you probe back far enough you should be able find out when the loan was taken out and you'll probably discover that was around the time of a new car purchase, grandchild at Uni, once in a lifetime holiday or new kitchen etc. Even a relatively small loan of say £20K could end up being £200K due back when the person dies depending on how long they live for.

Whatever it was spent on I hope he really enjoyed it at the time. All you can do now is reassure him you never expected anything from him and him just being your Grandad is more than enough.

And is a bit embarrassed about it now. He was in his right mind when he took it out and even is still now so all this about the OP going after the fraudulent bank is a bit strange.