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Original poster

Equity release? We’re desperate :(

212 replies

JupiterFortified · 04/01/2023 22:54

If anyone can please offer any advice I’d be really grateful.

My dad recently passed away and my mum is left with a house with a large mortgage remaining on it.

The mortgage ends soon and we have no means with which to repay it (mum
only has state pension income).

Following dad’s death I don’t think she’d cope if she had to move out of their home :(

So we are thinking her only real option is to apply for an equity release mortgage to pay off the mortgage - does this seem like the best option?

I am lost. For what it’s worth, I’m not worried about any potential inheritance being eaten up by the interest on the equity release. I just want my mum to be able to keep her home :(

OP posts:
Babooshka1990 · 11/04/2023 08:14

A few people here have said that people could only get interest only mortgages if they had a way of buying it out at the end. That’s absolutely not the case, you could just say ‘I will sell the house’. My Grandad passed away last year and we found out their mortgage is interest only, no idea why they made that decision but it seemed to be popular 30/40 years ago. They definitely had no plan to pay it off.

It’s a lifetime one so no end term, however my 85yo Grandma is now paying £800pcm (double what it was) due to the change of interest rates. She needs to sell but doesn’t want to leave her home.

shutthewindownow · 11/04/2023 08:18

usererror99 · 11/04/2023 07:14

This is ridiculous OP - why does your mum need a £450k house on her own and your parents have been incredibly stupid to have an interest only mortgage in their 70s with no means to pay it in the event of one of their deaths.

The house needs to be sold

Read back what you just typed. Her dad has died and you are calling her parents stupid Do you thing that's acceptable and in any way helpful. That's disgusting

mycoffeecup · 11/04/2023 09:18

shutthewindownow · 11/04/2023 08:18

Read back what you just typed. Her dad has died and you are calling her parents stupid Do you thing that's acceptable and in any way helpful. That's disgusting

Show quote history

Stupid might not have been the best word to use - maybe foolish, or naive - but @usererror99 is right. It's naive in the extreme to have an interest only mortgage if you aren't prepared to pay it off either by an investment vehicle or by downsizing and OP's Mum does need to know that her late husband hasn't left her in a great position.

DeeHellem · 11/04/2023 11:20

Babooshka1990 · 11/04/2023 08:14

A few people here have said that people could only get interest only mortgages if they had a way of buying it out at the end. That’s absolutely not the case, you could just say ‘I will sell the house’. My Grandad passed away last year and we found out their mortgage is interest only, no idea why they made that decision but it seemed to be popular 30/40 years ago. They definitely had no plan to pay it off.

It’s a lifetime one so no end term, however my 85yo Grandma is now paying £800pcm (double what it was) due to the change of interest rates. She needs to sell but doesn’t want to leave her home.

A lifetime mortgage is a mortgage where you don't have to pay anything, so if she's having to make a payment then it isn't a lifetime mortgage.

DeeHellem · 11/04/2023 11:27

mycoffeecup · 11/04/2023 09:18

Stupid might not have been the best word to use - maybe foolish, or naive - but @usererror99 is right. It's naive in the extreme to have an interest only mortgage if you aren't prepared to pay it off either by an investment vehicle or by downsizing and OP's Mum does need to know that her late husband hasn't left her in a great position.

Show quote history

It's actually quote common that one partner has taken to deal with the finances and the other is unaware of the implications of what's been done.

Maybe his intention was to downsize in future.

MorrisZapp · 11/04/2023 11:39

My mum had to sell the beloved house we all grew up in due to divorce. I was dreading it and she was being really difficult and obstructive about it but in the end she bought a nice little house which she now loves, and when I go past our old family home all I feel is slight curiosity as to what the new owners are up to.

Honestly, houses aren't people. You take all the important stuff with you. Ultimately if she can't afford the house then she can't live there. As age ages, it'll be such a comfort to her and to you to know that she can afford her living circumstances and has long term security.

FlemishHorse · 11/04/2023 11:54

This thread was started in January - so probably the situation has moved on, and everyone’s well meant advice may not be useful to the OP.

bellac11 · 11/04/2023 18:31

FlemishHorse · 11/04/2023 11:54

This thread was started in January - so probably the situation has moved on, and everyone’s well meant advice may not be useful to the OP.

Its only a couple of months ago, they're probably still trying to get their heads around things. If the mother is selling the propety they probably havent even had an offer yet

DeadbeatYoda · 11/04/2023 21:53

If your mum cannot afford the house then she should sell it, clear the mortgage and buy something with the remaining cash. It's nuts to try and keep a house she can't afford. It sounds like she would have had to sell it at this point anyway.

DeeHellem · 12/04/2023 08:27

DeadbeatYoda · 11/04/2023 21:53

If your mum cannot afford the house then she should sell it, clear the mortgage and buy something with the remaining cash. It's nuts to try and keep a house she can't afford. It sounds like she would have had to sell it at this point anyway.

The OP says she can't afford the mortgage not that she can't afford the house.

The OP wants her mum to be able to stay in the house.

A lifetime mortgage gives her that option, with no regular repayment needed.

mycoffeecup · 12/04/2023 10:23

DeeHellem · 12/04/2023 08:27

The OP says she can't afford the mortgage not that she can't afford the house.

The OP wants her mum to be able to stay in the house.

A lifetime mortgage gives her that option, with no regular repayment needed.

Show quote history

How likely is it that someone on a state pension can afford the upkeep of a house that size?

DeeHellem · 12/04/2023 14:23

mycoffeecup · 12/04/2023 10:23

How likely is it that someone on a state pension can afford the upkeep of a house that size?

Show quote history

What size is the house?

The OP says she wants to remain in it.

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