What Happens To The Equity Release Plan On My Death?
Following death of the last surviving partner, the equity release scheme will need to be repaid within a certain timescale dependent upon the lender. This is usually 12 months following death of the homeowner. The decision by the beneficiaries then is to determine how the equity release scheme is to be repaid. More often than not, this will be via the sale of the property which will clear the original loan, plus any accumulation of interest.
However, beneficiaries can chose to retain the property for themselves, for example as an investment for rental purposes, then they will need to raise the capital themselves to clear the equity release balance. If it was for investment purposes then a applying for a buy-to-let mortgage could effectively solve this problem or if they have sufficient savings funds already. In taking either route, the property will then be transferred into the beneficiaries name.