Deprivation of Capital / House Improvements

DazedorConfused

Hi,

My mother is currently in hospital and may or may not be able to return home again due to disbility, she is 86. She owns her own house outright, which is currently falling into disrepair. Neither my mother or myself have the funds to repair the house, e.g. re-roofing etc.

The house has been roughly valued at £160K in its current condiiton and we had thought about her putting the house in my name, I could then secure a small mortgage, about £25K on the house and get all of the required work carried out. We accept that she will end up in a care home at some point and that the money from the house, when sold, will need to fund this. However, how would this affect the mortgage I had taken out, is there a way to ensure that I get the sum of money out of the house to clear the mortgage before the house money is included in the care home fees evaluation? For example, if I got the house formally valued just now would that have any legal effect in setting a maximum that the coucil could calculate, since without the work getting done she will need to go to a care home anyway or something alse. However she would prefer to be at home for as long as possible, naturally. Oh - this is in Scotland.

Any help / advice appreciated very much.

McKneff

Is it not possible to sell the house as it is, i know it would go for a low price
but it would save a lot of hassle for you.

DazedorConfused

Hi, yes obviously selling the house in its current condition is an option, however not what we would prefer to do since my mother will hopefully return at least for the short term. I have suggested selling the house as is and buying a smaller, more suitable property, however she is completely attached to the house she has stayed in for 40 years (which I fully sympathise with) and she is also as stubborn as the preverbial mule!

McKneff

Sorry, i got the impression that she wouldnt be able to return home but i see your dilemma, she may indeed get a bit better and want to return.

Cant help any further than that I'm afraid but I'm sure someone will be along re mortgaging etc.

EdInvestor

The lender will place a charge on the property equivalent to the mortgage which should protect that portion of the value from the council's attentions.

monkeyspanner

Now that you have identified your mum may need a care home placement transfering the house to your name could be construed as a deliberate deprivation of assets.

If there was a way of you raising the money for repairs it should be possible to establish that you have beneficial ownership on part of the house even though the whole ownership is in your mum's name. Alternatively if you could raise a mortgage or loan you could then loan your mum the money secured against the value of the house as a private mortgage and then recover the money when the house is sold. In parallel with this and dependant on your mum's other financial circumstances it may be possible to claim assistance with the mortgage interest that would be payable by your mum to you. This solution worked well for me and my MIL when she wanted to buy her council house but couldn't raise a mortgage.

It may also be possible to obtain some assistance with repairs depandant on your mum's circumstances. e.g. coldfront scheme for heating, assistance with costs of installing loft and cavity wall insulation.

The rules do differ in Scotland and I would suggest you have a talk to one of the charities involved in this area. e.g. www.counselandcare.org.uk

DazedorConfused

Just a quick post to say thanks to those who replied, I think its looking more and more like my mother might go into care so I am hanging fire and we may just have to sell the house as is, which at least keeps things simple for me!