Pros and cons of getting equity on home

katiejfc · September 2019

My partner of 20 years is doing the equity on our home. Hes 60 and I'm 57 , The morgage is in his name, not mine. It's worth £130,000 What are the pros and cons for me? In 3 years time he might put me on the house but if something does happen to him in the next 3 years what would happen?

April2018mom · September 2019

Hello @katiejfc.

Welcome to Scope!

There are many positives and negatives about equity. Are you listed on the house deeds or not? Equity release is not something to be taken lightly at all- you need to basically do your research. Before you go down that route, consider downsizing first. Seek out advice prior to starting. Make sure you can fully trust the firm. Read the equity release policy carefully. Check the fine print. Talk to a financial advisor. Also speak with a mortgage broker to find the best possible deal. Do you have a will or not? Obtain advice on how your benefits might be affected.

Keep in mind the costs can be astronomical. Look at all of your options for equity release too. What can you afford? Work out your budget as well. I also recommend talking with your local bank for advice. Pay back any interest rates asap as they can increase if unpaid. Ensure the company is a member of the equity release council. Be prepared to ask a lot of questions. And make notes. Borrow only a little money at a time. Find out as much information as you can first. This is easier overall. Remember it is not cheap. Do you have any children? Get in contact with a equity release specialist, they will be able to provide information and answer your questions.

For more information, read this equity release guide https://www.moneysavingexpert.com/mortgages/equity-release/

https://www.ageuk.org.uk/information-advice/money-legal/income-tax/equity-release/

david235 · September 2019

If I understand your question correctly, @katiejfc , you are asking about ownership of the equity in the house.

The answer to your question is that you need to get a solicitor's advice on ownership of the equity in the house to have a good idea where you stand. If you have made any contribution towards the mortgage costs (or even that you have met other shared bills so that he can pay the mortgage from his income), there is a possibility that you are already the beneficial owner of part of the equity even though he is the sole legal owner. As anyone who has studied equity, trust and land law will know, legal ownership and beneficial ownership of land (land in a legal sense includes the buildings) are two different things. It comes as news to most non-lawyers that what the Title Certificate from the Land Registry (or deeds if the land is unregistered land) say about ownership does not necessarily indicate who is entitled to benefit from that land. It is possible that your situation has created a trust with your partner as sole trustee.

You have no right of occupation under the Family Law Act 1996 unless you are married to your partner - and even then there are formalities you would have to undertake to secure this right (it would have to be registered as a charge on the Title Certificate).

The cleanest thing, of course, is to agree a position with respect to ownership with your partner - though I would urge you to use solicitors to do this. Merely changing the records at the Land Registry might not fully resolve the beneficial ownership position. You don't want to find there is some unresolved situation if he finishes up in care or dies before you and one or more of the beneficiaries of his will challenges the ownership of the equity in the house.

Beyond establishing ownership of the equity, why are you asking? Is it about what happens if your partner dies before you? Is it about the effect on state benefits?

Pros and cons of getting equity on home

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