releasing equity & right to residence

The Duk

Hi, A friend of mine is trying to release equity in a house they own 50% of with a retired Parent. The parent has right to residence. they both live in the house and have no other property. There is no outstanding mortgage.

They want to modernize and extend the property.

They are finding it extremely difficult to get a bank or broker to even entertain the idea due to the right to residence.

Has anyone any ideas how they should approach this?

Thanks in advance.

Apologies if this should be in another section.

Peregrinus

The problem isn't the right of residence; the problem is that your friend only owns a 50% share in the house. Banks are going to be very reluctant to lend (or to lend further) on the strength of a security interest in only a 50% share in a property, because it's very hard to enforce that security in the event of default.

The co-owners of the house need to approach the bank with a proposal to jointly mortgage the whole house in order to finance the works to be done. The resident parent needs to appreciate the implications of this for their right to reside in the house, and may need separate legal advice to avoid any suspicion or allegation of undue influence. The bank will probably insist on this.

The Duk

I believe they are looking to mortgage together but the parent is 70+ and the banks are just saying no and stating the right of residence.