Everyone is aware that first time buyers are having a difficult time getting on to the property ladder, with the ‘bank of mum and dad’ often providing a much needed helping hand.
However, a trend is now developing in the form of grandparents offering financial gifts to their loved ones in order for them to buy their first property.
Concerns have arisen that grandparents are using equity release schemes to release equity in their own homes so that they can assist the younger generation. Whilst this is admirable, many people are not fully aware of how the process works. The debt itself is not paid until death, but the interest applied to these schemes can be extortionate – the outstanding amount can double every eleven years or so.
It is really important to take advice before making a final decision about entering into an equity release scheme. Feel free to contact us if you would like to discuss.