Even if you have reached 55 – the qualifying age for any Equity Release loan – the time may not be right for you just yet. On the other hand, your elderly parents may be in the perfect position to benefit.
It is in later life that these loans really come into their own. Borrowing against the equity in their home could help your parents in so many ways – from making their life more comfortable to giving their adult grandchildren a step on the property ladder. You may think it’s a great idea and something they should definitely pursue. But what will they think – and how can you talk to them about it?
Relative Values
If you have an open and comfortable relationship with your elderly parents, lucky you! Introducing the subject of Equity Release won’t be such a worry.
But, for many of us, there will be several hurdles to overcome…
- Your parents are your parents! Even if you are 55 or 60, you are still their child. If they like to think they have maintained the upper hand in the relationship, you may feel uncomfortable trying to turn the tables – even when you know it is in their best interest.
- They may be very private about their financial affairs, and there’s a risk you’ll upset them by tackling the subject.
- You are broaching the delicate subject of mortality. Equity Release loans – also known as Lifetime Mortgages – are designed to see the borrower through to the end of their life. Talking to your parents about the fact that they will one day die may not sit easily with you.
- Your parents may already have a negative view about Equity Release. Decades ago, these loans gained a bad reputation. Things have changed a lot since then. It is now a safe and respectable way to finance later life. But, if your parents have already decided they don’t like the idea, you may struggle to get them to hear you out.
Need to know…
- In my experience, the softly-softly approach often works best – but it will also require a bit of patience on your part. Start introducing the subject gradually and occasionally and wait for them to become intrigued enough to want to know a bit more.
- Use the news – for example, you could bring up the subject of later life finances if something comes up in a TV show, or if you find a newspaper article you could show them.
- Share friends' experiences. If you know someone who's using Equity Release, or whose parents are, that could be another entrée.
- Discuss your own plans. If Equity Release is something you're thinking about for the future, ask their opinion to gauge their feelings around the subject.
- Don't shy away from talking about end-of-life matters and death. By your late 50s, you're likely to be increasingly aware of your own mortality – and it follows that your parents, in their 80s, are also thinking about how much longer they have. In fact, it could be a major preoccupation, even if they've never raised the subject with you.
- Include a discussion around Equity Release as part of a broader plan around their Will and end of life wishes. They will probably welcome the chance to talk their worries through.
- Look on the bright side. Equity Release is something positive for them to consider – it is money that will come to them while they are still alive!
- Remember that modern Equity Release is a fully advised process and this means your parents will need to meet with an independent adviser who can answer all their questions. There will be no pressure to apply for a loan. What's more, if they do go ahead, a solicitor will be required to help to complete the process.
- Book a fact-finding meeting. Not every property is appropriate for an Equity Release loan. The only way to find out is to talk to an adviser, and have them look into the details of your parents' case.
- Reassure them. Applying for Equity Release is a hassle-free process. Most independent equity release advisers will come to your home for the initial meeting, or this can be done on the phone or by zoom. We can also arrange for a specialist solicitor to visit your parents at home.
For an initial chat, please feel free to get in touch by calling Martin on 0203 840 5011 or sending an email enquiry.
