To feel absolutely dreasful about asking parents for equity release.

[Meluamelua]

Just that really.

I'm in a very difficult position with a one pre school DC and one school aged dc and working part time. Unfortunately h left me two years ago (there were problems but I would have worked at it- he is now unemployed and living at his mums). Our home is rented and the land lord has made noises about wanting to sell for the equity. A little, cheap house has come up locally to buy (unusual as is an area with low housing stock) and I could just about do it if one or other of my parents released a relatively small amount of equity (about 100K each) Between them their homes are valued at about 3.5 milion. They have never given me any money before.
My mum is livid I have even asked her and says I am spoilt and grasping. My dad simply put the phone down on me. My brother said I should expect these reactions.

I feel dreadful. Is it so bad to ask this of them? At the end of the day it is security for their grandchildren while still school age and the money will go to them eventually in some form.

Am I naive, grabby, entitled?

Perfectly prepared to be told I'm being unreasonable. Go easy though I'm a bit sore from all the stress!

Assets are just that, not cash in the bank. You are asking for a huge some of money - the answer is yes or no and the wherewithall is not your business. How do you know what your parents detailed financial situation is?

I do think relatives in a position to help in times of need should but that is a personal decision and not a legal obligation. I think you need to do more research on how you can manage long term financially and stop considering other people's money as a viable or expected option - it isn't - if it happens ever in life then it is a bonus.

I don't think you're unreasonable to ask if your parents can help you out this way. But, be prepared for them to say no, which also wouldn't be unreasonable.

I think OP is getting a hard time on here. If the parents have a house worth that much than I doubt it is their only asset. I am sure the OP would not have asked if she felt they were going to be at risk or out of pocket. There are plenty of parents who would release much more than that to secure their children's future.

And yes, they are under no obligation to part with it but as other have said why would you see your GC face uncertainty.

Their reaction was over the top but they have the right to say no. I suggest maybe sending a card/letter apologising for asking and making a awkward situation and suggesting you all draw a line underneath it.

Good luck OP.

I can understand things a bit from the Op's perspective. Many people from that generation have hugely benefitted from rises in house prices which has made them asset rich whilst locking out younger people on lower incomes who am no longer able to buy their own modest home.

However this plan was ill conceived from the start. First at 4.4pc you must be talking around £8800 per annum in servicing costs which is a lot for 1xpt wage. Second it is all very well so say you wouldn't expect them to service it but legally they must. And if the op couldn't pay for whatever reason then they would have to and if they couldn't it would put their own homes at risk. And why would anyone want to risk their own home like this when if retired they're not in a position to increase their income. Third you could also have an inheritance tax problem if they die within seven years. Forth a request like this out the blue is only likely to breed resentment both with your parents and any siblings.

to even heat the size of properties that £3.5 m gets you together even in London they must have decent pensions. I agree though, you're not going to get anywhere op so you should try and patch it up with them (the card is a good idea) and make other plans.

Many people from that generation have hugely benefitted from rises in house prices which has made them asset rich whilst locking out younger people on lower incomes who am no longer able to buy their own modest home

Its plain old ' I'm alright jack pull up the ladder'

My parents bought their house 30 years ago for around 100k using an inheritance as a deposit. That house is now worth a couple of million, not sure exactly, never been valued. But, they do not have cash or large private pensions. When they need it, that house is their nest egg to pay for care or whatever they need in old age.
I would feel hideously grabby and entitled to even think about asking them to put them into debt for me. You owe them both a massive apology.

Also op did you call and ask "sorry to have to ask but is there any way you could help us out? " or did you call and start " we have to move and since you have a huge asset to borrow money against, I thought it would be easy for you to buy us a house for a couple of hundred k, I can pay the interest you know"

Only because this is an awkward topic to raise at the best of times nevermind with family who have never ever loaned or given money.

I know life is not fair and you are stressed but maybe this led to the request coming out a bit wrong and some bridge mending is needed.

I hope you find a good solution, it is bloody hard work lone parenting.

I couldn't live in a property of that worth and see my children struggle.

Yanbu at all.

If the parents between them intend to leave £3.5m of assets to two children when they die, if they have any sense I'd have thought that they would have already looked at ways of transferring wealth to them now to reduce IHT liability.

I don't think it's unreasonable at all to ask the question, if you think that it's genuinely an option for them. Whether it's a real option depends on what kind of instrument the equity release would use. A remortgage, with monthly payment obligations? Potentially risky. A cash sum with no repayments, in exchange for an equity interest in the property? It makes a lot of sense for some people.

And while £200k may seem a lot to most of us, in this particular situation it doesn't strike me as particularly outrageous.

Between them their homes are valued at about 3.5 milion

If I understand the OP correctly, we are not talking about a mansion here, but at least a couple of house in the South East.

A million pound house in my area is nice, but it's nowhere near a mansion, the prices are crazy.

they must have decent pensions.

Not necessarily some that have houses of that worth, the house is their pension.

to even heat the size of properties that £3.5 m gets you together even in London they must have decent pensions

My parents have a north london, zone 3 house worth roughly 1m, so about the same value as op's parents (1.25 m each).

It's a perfectly bog standard terraced 3 bed 2 double, 1 single bedroom. Lounge, kitchen, conservatory. 1 bathroom.

Far smaller than than dh's parents detached manchester home, which is a 4 bed, family bath, ensuite, downstairs shower room, utility room, parking, for £400k.

For my parents to downsize they're looking at a small flat, or relocating away entirely.

Just because on paper a house is 1.2 m doesn't mean it's a huge luxurious mansion.

I'd have asked if my P were that wealthy and if my DDs were in your shoes and I was sitting on huge house wealth i hope i'd downsize for my dc and my gdc. I'd hope i was a good enough person to do that when the time comes. Yes it's not ideal to have to ask and £100k is a lot to ask each parent for, but you're obviously desperate and in a tough spot. I think your brother's right though, you weren't wrong to ask, but your parents obviously might've reacted badly. I don't think a lot of them for it though if they could easily help you.

They might not be easily able to help. They might have bought their houses a long time ago while cheaper and now they have increased in value. Despite having houses worth a lot they might be cash poor.

And also, how much does the OP want to put down on a deposit if she wants £200k?? Does she want to buy it outright? That's an absolute pisstake really imo, by all means, ask for help with a deposit but pay your own mortgage.

And if it takes a 200k deposit to buy in that area OP should set her sights a little lower and move to a cheaper area.

I would help my DC in that situation. No way would I see them rent while we live in a huge property. In fact that is one of the main reasons we have invested in property so we can help them out later on. Personally I wouldn't like to be asked though and think that is unreasonable.
They will both be getting the same amount at the same time no matter what their circumstances are.
I have seen too much unfairness when those that have worked hard and made good choices end up losing out to those that haven't.

No way would I see them rent while we live in a huge property

In London and SE a house for the amount of OPs parents certainly wouldn't automatically be massive. In fact it could be your average semi.

We don't know enough do we, everyone is jumping on OP but there are so many variables. Do the parents live comfortably? How many other siblings and would they then want some money too?

I would help without hesitation, but if I couldn't help and my DD had asked I'd be upset - with myself.

Equity release is a terrible scheme, you end up losing a lot more than you borrowed because of compound interest. At the same time if I owned a £1.5m+ house and my daughter was on her own with 2 kids and renting and struggling I'd definitely want to help her out. If I had multiple kids I would just make the same amount available to each of them. In fact I plan to do this when my children reach adulthood.

Made good choices?
Been lucky that they invested in an asset class which has massively appreciated more like!

Their response was quite abrupt (I do wonder if there's a backstory here perhaps?), but crikey, that is a lot of money to ask for. And to ask them to remortgage or move seems more than just a wee little favour. If I asked my parents for an equivalent loan (percentage-wise - their homes are worth nowhere near 3.5m) I expect they'd let me down easy, but be quite shocked and possibly a bit hurt by my audacity.

My parents are going to need any assets they have to pay for care in old age - I don't think of the equity in their home as being somehow held in trust for the grandchildren. It's theirs, and they will need every penny of it when the time comes that they can't live independently anymore. And I'll be grateful they have that security.

I do think you were a little U to ask for this - generally it is something that is offered if at all, and asking does seem grabby. Especially talking about it as a 'small' amount. Irrespective of their house values, it isn't a small amount.

I'd be concerned if you could even meet the payments. If your parents are nearing retirement, their mortgages may be just 10 years or so left. That would mean the repayments on that £200k would be around £2k/month - could you afford this? On top of your own mortgage repayments?

I'm in no way as well off as GPs in this thread but would help if I could. Happily.

However there are so many variables here:
Are you able to get a mortgage and if not why not?

Did you have a good relationship prior to this request and how did you go about discussing this? I'd be shocked if I found out that one of my DC had been planning this without sounding me out.
How did you think they should release this cash? Had you discussed it or considered it?

Life is hard as a single p (or even as a couple juggling housing, work etc) so I'm really sympathetic.

Very different asking if they have £1 million sitting in the bank as disposable income compared to £1 million fixed asset in a house price 'book value' increase.

Asking 2 people to take out a £100k loan each to fund your housing is VU.

Coldfeet that's just what I was trying to say - lots of ifs and buts.

If you were my child and i had a 3.5 mil house i would hope that i would have helped you on the property ladder without having to ask. 100k is a small percentage of 3.5 mil !!