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According to a recent survey, an increasing number of over 55’s are taking out equity release “lifetime mortgages” in order to help their children with a deposit.
Equity release provider Stonehaven surveyed financial advisers and found that giving children and grandchildren a financial boost is now the third most popular reason for releasing equity.
With many young people still finding it difficult to save the money required for a mortgage deposit, it is falling to the over 50’s to unlock the equity in their own properties to provide the deposit their children now need.
Stonehaven’s managing director said: ‘At a time when the younger generation are struggling to get on a foot on the housing ladder, lifetime mortgages are providing an effective way for parents to help their children or grandchildren get started.”
Equity release has become an innovative and flexible solution for homeowners who wish to unlock the equity from their properties in order help with home improvements, holidays, new car or in providing financial help to their families.
The survey identified that in many cases where the children benefit from the equity in their parents’ or grandparents’ property, the children often agree to make the interest payments on the mortgage.
Post courtesy of Thisismoney.