Equity release loans being taken out to help children

Equity release loans are not as popular among home owners now as they used to be, which is clearly shown by the recent figures from the British Bankers Association (BBA). The unwillingness of home owners to take on more loan debt and the lack of equity in their properties to meet LTV maximum are the major reasons for this.

The data shows that the number of equity release loans dropped by 16.5% in February 2011, compared with the same period a year ago.

While not many people apply for equity loans in the mainstream loans market, the situation on the retirement equity release market is quite the opposite, Dean Mirfin of Key Retirement Solutions claims.

He also informed that a substantial increase in equity release loans was observed by the company, mostly from parents with the purpose of helping their children and partly from retired individuals with the aim to boost their income.

With thousands of working families still trying to make the ends meet and struggling to keep up with home owner loan repayments as well as other debts, an increasing number of parents who have reached the age of retirement go for equity release loans in order to help their chidren.

According to the data, the average loan amount taken out with the purpose of helping children is more than £23,000.
 


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