As consumers learn more about the perils of fast secured loans, they are seeking help from their parents in greater numbers. Fast secured loans typically have very high interest rates and for those that can’t afford this, the bank of mom and dad is usually a better choice. However, by avoiding fast secured loans in this way, mom and dad may actually be in financial risk according to the experts, especially if their children do not pay back the loan quickly.
“The new generation of retirees are bucking tradition and no longer believe their children have an automatic right to inheritance.” said Andrew Goodsell, chief executive of the SAGA Group. “They are using the money from equity release to enjoy their retirement.”
Keith Haggart, director of Lifetime Mortgages at Prudential said that “Although most retired homeowners have seen the value of equity in their homes fall in recent months, it’s important that they don’t lose sight of the bigger picture which is that despite current falling property prices, in the vast majority of cases retired homeowners have built up a significant amount of equity in their homes over a number of years.”
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