Funding the cost of a carer or residential care home fees can be a huge financial challenge for many families. In our latest Q&A, we hear from a reader who wonders if equity release might be a solution. Mark Gregory offers expert advice
The Question
My Mum and Dad are in their 80s and my dad is becoming increasingly frail. We think he may need to move to care home in the near future.
They are both of sound mind and wish to take out equity release to support the cost of the care for my dad when the time comes. However, we are a little confused as to whether we can use the money for this purpose based on the fact standard equity release loans are repaid once the homeowner either dies or goes into care.
Please can you clarify the situation for us?
Mark’s Answer
Hello, and I am happy to help you with your enquiry. Firstly, I am sorry to learn that your dad is becoming increasingly frail, and I can imagine that you want the best care for him, but you also want your mum to be safe and secure in her home for the rest of her life.
Equity Release could be a viable option for your parents to raise capital to help with your dad’s care costs. You are right when you say that the equity release loan is repaid when the homeowner dies or enters long-term care; however, this is on the second death for a joint application.
Therefore, if mum and dad applied in joint names, the plan would continue in their joint names until they have both passed away or they have both entered long-term care, so your mum would have lifetime security.
However, at this stage of your research my advice is twofold, firstly, you could call one of our expert, whole of market advisers, and after asking you a few basic eligibility questions, they can provide you with explicit details of what your parents may be able to access to pay for your dad’s care. Our advisers can be contacted by telephoning 0800 802 1051 or via our free Livechat facility on the Equity Release Supermarket website.
Alternatively, you could use the smartER comparison facility to find out how much your parents could raise, and it will provide explicit details and live interest rates.
Secondly, although equity release maybe a viable option for your dad’s care costs, I would strongly suggest that you contact your parents’ local authority who can help you by arranging a care assessment.
Once this is complete you would know what funding would be available to pay for your dad’s care costs and, if you need to raise capital, how much you would need. Then our advisers will be able to provide explicit details about your options for equity release.
Finally, to enhance your research and understanding, I would recommend that you contact My Care Consultant https://mycareconsultant.co.uk who are a trusted firm who aim to guide customers through a complex UK care system.
Meet our expert…
Mark Gregory, founder and CEO of Equity Release Supermarket, is here to answer your questions. Mark is an adviser himself with over 20 years equity release experience.
He launched Equity Release Supermarket 10 years ago and it has grown to become one of the UK’s leading equity release specialists.
Email kate.saines@emap.com to ask Mark a question
