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Nicola-mod
Nicola-mod, Moderator
Category: Law
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my brother in law holds a charge on our property for the £100000

Customer Question

my brother in law holds a charge on our property for the £100000 he lent us to purchase the property. we are 2 severely disabled people and need equity release to cover the £48000 principle on the current mortgage. if my brother-in-law has the charge legally removed, can it or something similar be put into place so he will eventually get his money back?
Submitted: 4 years ago.
Category: Law
Expert:  Aston Lawyer replied 4 years ago.

 

Hi there,

 

Thanks for your enquiry.

 

If you proceed with the lifetime mortgage, then firstly, your brother in law will have to agree to remove his existing charge (so that the lifetime Mortgage provider gets a first charge over the property) and their consent would be required for your brother in law to place a new charge ranked below the lifetime mortgage).

 

Please note that equity release/lifetime mortgage providers do NOT normally agree to a second charge being placed on a property. Your financial advisor should be able to get confirmation one way or another from them.

 

Even if the provider agrees to the second charge, the next question is whether your brother in law would accept this. I don't know how much equity you have in the property, but as you will be aware the amount outstanding under the lifetime mortgage will accelerate and there may not be enough in the pot to clear your brother in law's charge as and when the property is eventually sold.

 

I trust that you are aware of the implications of entering into a lifetime mortgage-namely that the amount outstanding escalates quite rapidly.

 

I hope this answers your question, and if so, I would be grateful if you could leave positive feedback.

 

If you do require any further clarification, please let me know.

 

Kind Regards

AL

Expert:  Nicola-mod replied 4 years ago.
Hello,

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Thank you,
Nicola