BOI Lifeloan or SHIP Alternatives - HELP ??

[lettermac]

Hi,

Any advice on the subject matter below would be appreciated.

My parents are now in their late sixties. My dad is retired. Their house is worth circa Eur450k. The problem lies with the fact that they never really put much thought or money into their pensions and are now very tight on a monthly basis. They are basically getting the old age pension plus a small amount from a private pension plan.

I'm looking for ways to supplement their income without having to enter into either the Lifeloan or SHIP option. Trading down in not a runner at present.

There are 5 siblings but we all now have our own pressures, but I'm wondering if collectively we were able to collate something between us, could we avoid having to sell part of the house to BOI or SHIP (as I know the rates of interest are severs), but rather extend one of our own mortgages or would we be able to somehow borrow around Eur75k, and secure it against the house. We could use this pay off their small debts (Eur10k) and invest the rest in an income generating product with capital security (I think this would be better than an annuity type product).

We will inherit the house eventually so all I am trying to do is to give the folks part of the money we will ultimately inherit through their estate. I'd rather see them have it and enjoy it now rather than us getting it whenever they pass on.

Any suggestions or advise would be really appreciated.

Many thanks,

 

[demoivre]

Have they considered trading down?

 

[Brendan Burgess]

Check out the Key Financial Posts

 

[ClubMan]

There are several threads dealing with products such as SHIP, BoI LifeLoans and some other similar product (from a crowd called RRL - Residential Reversions Limited I think?) elsewhere on the site which you should be able to find by searching/browsing.

Trading down could be a good idea since it allows them to take a lump sum capital gain tax free. However, obviously there are probably more than just financial aspects to such a decision.

 

[WizardDr]

If at least one of the siblings has a property with equity, extract from that and all the siblings contribute to the borrowings, leaving parents house debt free.

Note: Lifeloan is not a sale of property, and even with moderate house price inflation could be neutral in terms of the final loan still being the same % of the value or less.

The other schemes involve a sale of house. The amount that is eventually given is less than 50% of the portion sold.

They also get the upward value movements.

So SHIP and RRL will look like a credit card interest rate in a look back.