AIBU to think this is a bad idea

[EquityReleaseAdvice123]

Name changed! AIBU to think this is a bad idea

DH parents recently took out an ER scheme (they are late 70s early 80s) and DH thinks it will be possible to keep the family home and repay the debt (assuming they don't need to care home facilities) by taking out a new buy to let mortgage to pack back ER company in the future.

PIL have reasonable health and could live another 20 years! I just assumed people sell the home to pay for this kind of thing.

I am confused, will it be possible to get a buy to let mortgage for just the value if the debt? I am assuming we would need the usual 25% cash deposit, rental income projections, usual landlord requirements and additional stamp duty.

I don't think the companies work like that do they?
They buy it dirt cheap then sell it on the open market for full price.

He could make an offer like everyone else I suppose.

Has he read through all the company's t&c and how they work?

How recently did DH's parents do this?

It was my understanding that theses equity release companies basically buy homes cheap this way and sell on for big profits once through owners pass on.

No harm in asking, but I doubt they sell their share back to you for what or near the price they paid, that would be a good business model.

I think you will find that there is a lot more regulation on Equity Release these days and many more reputable companies are in the market. I hope they took independent financial advice before going into this - I think it may be a requirement these days. So don't despair.

Hopefully a IFA will be along soon to advise.

My in laws did this. After the last person died they gave 12 months to pay back the loan. The house was sold as normal through an estate agent

DH’s parents only just done this (last few months).

We got talking and DH seems to think if for example 100 grand (house currently valued at 750k which needed to be done to access the ER loan) is owed he could get a mortgage to pay this back.

The whole situation was very stressful but I really commend his parents for including him in the process. DH would like to keep the home in the family but realistically he is not thinking if the cost implications and responsibilities of being a landlord. He is not a high earner though has potential to be one, not particularly good at saving and may even try to use our joint savings to repay any debt just to keep the house of it came to it.