Mr and Mrs L were referred to Compass by a local solicitor, as they wanted some information about equity release.
They explained that they had moved house 18 months ago and purchased their home outright, with the intention of carrying out some improvements to make it more comfortable for them and for Mrs L’s elderly mother who lives with them.
Unfortunately, around the same time as their move, their son was going through a divorce and they used all of their remaining savings to help him through this difficult time, leaving them unable to realise their plans for the property.
They required £20,000 to modify the property, and they also asked to have the facility to draw an additional amount in the future if necessary. Although they both receive pension income, they did not feel that making payments would be affordable and wished to be able to roll up the interest on their mortgage. Our mortgage advisers explained the drawbacks of interest roll-up and how this will have a significant impact on the equity remaining in their property and any inheritance that could be left to their son.
We suggested they speak to their son to discuss this and that they should look to see if he has the means to pay them back in order to avoid the need for a lifetime mortgage. Mr and Mrs L explained that they had already spoken to him and he supported them in the decision to release some equity, as he did not have any concern about an inheritance – he just wanted the best for his parents.
We researched the options and found the ideal product that allowed an initial £20,000 release with up to £40,000 extra available in the future, without further underwriting.
Mr and Mrs L were delighted with the mortgage and have begun to make the alterations to the property and since then we have also met with their son to arrange a remortgage.