.. to ask for your thoughts about equity release?

[LeftieRightsHoarder]

I have an 80-year-old friend who plans to raise money on her mortgage-free home through equity release. She has a good chance of living 15-20 years more, as she is active and healthy, and comes from a long-lived family.

She has no children or other dependants, so is not bothered about having nothing to leave. But I have never heard anything good about equity release, and I fear she could find herself homeless and penniless.

I would very much appreciate advice or information from anyone who knows anything about equity release, or knows people who have tried it.

I found a useful article by impartial researchers here: https://www.durham.ac.uk/business/impact/finance/the-darker-sides-of-equity-release/

Thanks for any advice.

It is rarely a good idea, but if an 80 year old, who isn't married or has any children requires extra money to live out their final years in the comfort they deserve, then why not? This is probably the type of person who should be taking it out!

What problems are their for anyone who inherits?

They sell the house in the usual way and the loan is settled, same as a mortgage would be.

NO! tell her not to do this. She will be trapped in that property. The loan is repayable when the property is sold or she dies. If she becomes disabled, she will no longer be able to downsize to more suitable accommodation or afford a decent care home.

My PIL did this in their early 60s. MIL refused to leave her large home she had brought her family up in. They had plenty of equity and could have bought something nice with funds leftover to spend.

Fast forward nearly 30 years later. MIL who is now aged 90 and disabled is living in one room. The house is literally falling apart. FIL spent his last years in a care home (paid for by DH and his siblings) partly because the house was unsuitable. Her beloved house will eventually be sold at auction and likely demolished and redeveloped as it’s in a prime location.

We are weighing this up. Approaching 70. Smallish mortgage to pay off, moving costs and so on. Hardly worth bothering.

I said "if any". But for example for most people it means it has to be sold, so son/daughter cannot move into it without taking out their own mortgage to refinance the debt. They also want their money within 12 months which can put pressure on to sell in a slow market (instead of hanging onto the property for a bit longer). It's just an added consideration.