EQUITY RELEASE SCHEMES.

[sixtiesgirl]

Can anyone give me some information, and advice regarding the above? I`m fairly recently widowed, so rather fragile at the moment, and not really up to consultations with lawyers etc, at the moment.

I have very little actual capital, but I own my home outright. I would like to help my daughter and her husband, who are struggling in a small London flat, with a new baby. The house will be hers, of course, when I die, but it`s now that she needs the money. She is completely unaware that I am thinking along these lines, and may not welcome the idea. I would just like the thoughts of others who perhaps have some experience of this type of scheme. Thank you.

I'm sorry for your loss. Basically it's like a remortgage, only you don't have to make payments on it (although you can choose to with some companies). Interest accrues on the loan amount you have taken, and the loan plus the interest is taken from the capital once either you die or if the property is sold, whichever happens first. It's important to choose a company who guarantee they won't take more than the property value - if you live for a long time then the interest really does add up and if you have any other assets they can be included if you eventually owe more than the property sells for if you don't have this guarantee.

As I said, some people choose to make payments on the interest (or part of it) so that there will definitely still be some equity in the property if they are leaving it to family, although if you have already given them some money from it, that may not be a concern.

Thank you Rockchick.

It`s obviously something that I will need to discuss with my family, before making any decisions.

Please think very very carefully before doing this. I believe that this industry is somewhat unregulated. Basically, you might be able to give your daughter, say, £20k now, but it might cost you/her £100k off the price of your house later. My understanding is that equity release is like paying a LOT of money/interest, for cash today. I am sorry about your loss and that you are feeling fragile. Please take a lot of time to consider if this sort of thing truly is the best solution for your family.

Hi, I work for the Equity Release Council and it is in fact a highly regulated product and the safety of consumers is protected on two levels ? both by the Financial Conduct Authority (FCA) and our Code of Conduct.

If you contact one of the advisers on the Equity Release Council website at www.equityreleasecouncil.com then they will be able to provide you with impartial advice and information about equity release. Although it is not an appropriate choice for everyone it is certainly worth considering alongside your other options.