Homeowners risk gifting their equity despite having retirement fears
Homeowners are taking out equity release to help their family, despite being worried about their own retirement plans, according to 63% of brokers surveyed by a building society.
Furthermore, 47% of intermediaries said unlocking cash from homes to give away to loved ones is the most common reason for taking out a mortgage later in life.
The findings come from a survey carried out by Suffolk Building Society, which also found that 61% of brokers said their clients were concerned about striking the right balance between helping family while planning for their own future.
Rather than gifting money to family, parents or grandparents can join them on the mortgage to assist with affordability, but the mutual said joint borrower sole proprietor (JBSP) it is not a widely known option among homeowners.
Only 16% of those surveyed have worked with older borrowers who were looking to be added to a mortgage to help out rather than handing over cash, and in 65% of JBSP cases, it was brokers who were suggesting this option.
Charlotte Grimshaw, head of intermediaries at Suffolk Building Society, said: “Brokers have an important role to play in helping borrowers consider the wider implications and what options are available for providing financial support to adult children. It all starts with a conversation, and understanding what the family’s goals are.”
Episode 2: Affordability : Powered by Partnership podcast from Newcastle for Intermediaries
Sponsored by Newcastle for Intermediaries
