My relative has used an equatity company to release some finance, tied up with the they own and live in years ago. Looking at end of life care, is the whole house value taken as asset or just the amount left if sold today?? Thinking of nursing care and not sure if we would qualify for CHC with just dementia?
How does a equatity asset work when paying for nursing home?
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Most equity release agreements are based on the value at the time of sale, so if there is anything to recover it should be paid on the sale of the property to the owner of the estate or their executor or LPA. But you will need to check the small print, depending on what was agreed to in the first instance.
Some equity release companies will charge you for early settlement, and this can also be expensive around £10,000 on top of what has been lost on the borrowing
Some equity release companies will charge you for early settlement, and this can also be expensive around £10,000 on top of what has been lost on the borrowing
This is actually quite a question.
As I understand it, Equity Release, You take a proportion of the value of the house, by agreeing to repay the capital plus compound interest, on either death or entry into a Care Home.
If a large proportion is taken, then the residual value could be very low.
Could this be "Deprivation of Assets" if the money is not spent wisely on care?
After all it wouldn't be the first time an elderly parent has had to bail out a wayward child.
Bod
As I understand it, Equity Release, You take a proportion of the value of the house, by agreeing to repay the capital plus compound interest, on either death or entry into a Care Home.
If a large proportion is taken, then the residual value could be very low.
Could this be "Deprivation of Assets" if the money is not spent wisely on care?
After all it wouldn't be the first time an elderly parent has had to bail out a wayward child.
Bod
Totally incorrect, there are many on here who rent out a house to help pay care home fees.
The LA have to assess the value of the property and take into account any; mortgage, secured loan, equity release of anything else registered with the land registry as they will have a charge against the property, normally a first charge which means they get paid before the home owner on the sale of the house as they have the first charge against it. The house will be assessed at its "realisible" value i.e. it's value after all debts secured against it have been "discharged" which is a legal way of saying paid.
A £200,000 house with £100,000 of secured loan against it is classed as a £100,000 asset.
The equity release company may have a no lease clause but the LA do an assessment based on the part of the asset held by the person being assessed not the total value of the asset
Welcome to TP Pat, it's a big learning curve.
K
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