Do I have a problem?

SueP1944

Hi,

I have no idea if this is the right place but it seems to be.

My husband of 31 years is 62. I am 66.

We have our own house and since he had to leave his job last year due to ill health, we have been struggleing with our money. We have a mortgage which was taken out in 2004 for £100,000.

We cannot have any of the interest paid for us by Pension Credit.

One of my many problems (I'll go into the rest at a later date), is do we have a time bomb ticking away underneath us?

I have never worked since having twins in 1981 and my husband has provided for us all.

When we bought this house, it was in my name (don't ask why, my husband doesn't believe in home ownership and prefers to rent. He believes that only 'posh' people live in their own property). The mortgage was taken out in my name only but using his income to prove that we could afford it. So the deeds everything belongs to me.
I remember my husband having to sign a document when we bought this place that he would have no call on the property and he would have to vacate it if requested to do so.

Now, that I am also in bad health, the worries that I have are threefold.

1. If I die, and the mortgage hasn't been repaid, will he be evicted by the bank so that it can be sold to repay the debt? Would he not be able to carry on paying it himself even though he has nothing to do with it?

2. If I went into a care home, would they make me sell the house to pay off the mortgage, with any equity being used to cover the fees? Where would my husband live?

3. If he went into a care home, would the house be treated as his capital (seeing that he has been the one that has paid all of the mortgage payments & bills) and then would I be homeless?

4. Obviously if he dies, the house is still mine and nothing is affected.

My husband just shrugs his shoulders at these questions and says that he doesn't care as he would find somewhere to go.

I don't want my husband to be in this position seeing that he has paid for the property and he put in a considerable amount of money as a deposit in the first place.

What I can say is that he refuses to entertain the idea of taking responsibility for the property by putting his name on anything. We have always lived in rented houses until this one was purchased. All he says is that renting was good enough for his mum and dad it is good enough for him!

sleepless_saver

1. A lender would not let your husband have a mortgage unless they were sure he could repay it. Obviously that will depend on his income and with a £100k mortgage he'd need at least £30k (people on mortgag board will be able to give more detailed advice). Otherwise, yes, the house would have to be sold on your death to repay the mortgage debt. Unless of course you take out/ have taken out life insurance to cover the mortgage.

2. Not if your husband is living in it.

3. No, see 2 above. If your partner is living in the house it can't be used to pay care home fees. This has its downside, as paying your own way gives you more choice.

Assuming none of these bad things happen, will you be able to pay off your mortgage when the mortgage period ends? It sounds like you might have a problem remortgaging?

SueP1944

sleepless_saver wrote: »

1. A lender would not let your husband have a mortgage unless they were sure he could repay it. Obviously that will depend on his income and with a £100k mortgage he'd need at least £30k (people on mortgag board will be able to give more detailed advice). Otherwise, yes, the house would have to be sold on your death to repay the mortgage debt. Unless of course you take out/ have taken out life insurance to cover the mortgage.

2. Not if your husband is living in it.

3. No, see 2 above. If your partner is living in the house it can't be used to pay care home fees. This has its downside, as paying your own way gives you more choice.

Assuming none of these bad things happen, will you be able to pay off your mortgage when the mortgage period ends? It sounds like you might have a problem remortgaging?

Hi thanks for the comments.

1. No, following my husband's ill health he is not earning anything now, we live on Pension Credit. No there is no insurance.
If I could make my husband join me on the mortgage, would that mean that he could stay in the house as long as the mortgage is paid? It seems a little unfair that it was his money that paid the deposit and his money that paid the mortgage all of the years.

2. I have been told different by CAB. Because he has nothing to do with the house, and everything is in my name, he is treated as a lodger in his own home. He has no legal right to stay in the property, that is clear from the legal document he signed when I got the mortgage. Or are you saying that just because he is my husband he does have a legal right to stay and that the home would not be sold leaving him possibly as a squatter.

No we can't pay the mortgage anymore without his income. We can't get any help from Pension Credit either.
The mortgage is due to be repaid in 9 years.
We are just waiting here until they tell us to get out. Had a few letters about the arrears and the bank are going for an order, but we can't offer anything to them.
I presume they will take the house off us at some time in the future, we will have to wait and see what the court is going to decide. But that is another problem we have. Will cross that bridge when we get to it.

sleepless_saver

1. Sounds reasonable, but I'm not absolutely sure. The lender would have to agree to put him on the mortgage, of course. Is there any reason why you can't both have life insurance? I know it's extra costs, but it would remove this particular anxiety.

2. CAB is right about the legal status in that he is technically a lodger and would have to leave if you asked him. But I don't think that is the relevant point here.

"When one of a couple enters a care home on a permanent basis the local
authority has to disregard the resident’s interest in their former home for as
long as the other spouse or partner remains there." Age UK factsheet

The position would change if your partner moved out of the house which would then be sold and your share of the proceeds used to pay the care home costs.

Finally, if you're receiving pension credit, why did the Pension Service refuse to pay the mortgage interest? If you have care needs, you might be entitled to attendance allowance. And if your husband has care or mobility needs as a result of his ill health he might be entitled to disability living allowance.

sleepless_saver

SueP1944 wrote: »

We are just waiting here until they tell us to get out. Had a few letters about the arrears and the bank are going for an order, but we can't offer anything to them.
I presume they will take the house off us at some time in the future, we will have to wait and see what the court is going to decide. But that is another problem we have. Will cross that bridge when we get to it.

If it's getting to that stage, then it really sounds like you need some debt advice to see if anything can be done rather than waiting for the worst. It may not be as hopeless as you think - for example if you had enough equity in the house, that could be used to pay off the mortgage via one variety of equity release. And there is a government mortgage to rent scheme (though not suitable for most people).

You can get debt advice free from Consumer Credit Counselling Service (CCCS) Tel: 0800 138 1111 http://www.cccs.co.uk/ or National Debtline.

SueP1944

Life insurance has never been an option. I have Liver failure, and my husband has .. well to be honest there isn't the space here to put everything on. The most life threatening condition is Severe Chronic Pancreatitis which caused Permanent Thrombosis of the Splenic Vein which in turn has created Collaterals in the wall of his stomach that are now Varices. In other words he is ready for the 'knackers yard"!!
We can't even get travel insurance. In all sincerity, after 2011 he is on borrowed time.
He seems more than happy to be described as the 'lodger'. To be honest his insecurities come from his childhood, as he never knew what it was to have any form of security, or permanent home. He moved from lodging house to lodging house. That has carried through into his later life as he thinks it normal to have no roots or a place called home. Home to him is just a house, building, flat or lodgings.

Pension Credit is a long story. To get this house we had to borrow the balance from a friend as the vendor wanted a quick sale and somebody else was in the pipeline to buy it. Then after a couple of weeks the mortgage came through and I paid off the friend. The problem was that before the mortgage was completed and the monies received the deeds at Land Registry showed me as the owner. Therefore the mortgage was not used to buy the house, as I already owned it by virtue of the loan. Because it wasn't a secured loan just something between friends, it does not count as a mortgage. It has therefore been treated as release of equity.

I claimed Attendance Allowance when I was 65, but that failed.
My husband ...again another long story, but the gist of it is that about 15 years ago he was seriously injured. His Social Worker got him full Indutrial Injuries Benefit & DLA Higher Rate Care & Mobility.

Over the years since he didn't bother making any renewals, so eventually everything was taken off him.
He did make a claim for ESA, but that failed last year after a medical. Likewise the local DIAL sent in a claim for DLA at the start of this year and that failed. So not had a lot of luck so far.

SueP1944

Hi Sleepless,

Thanks for that info about the mortgage. We don't have much debt apart from the mortgage.
Credit Cards £3000
Loan £5000

The house is worth ...well it depends... would go on the market at about £195,000, probably sell quickly at £170,000. There is a mortgage (including arrears) of £103,000. Minimum equity would be £67,000 (£59,000 after debt repayments) and as much as £93,000 (£85,000 after debt repayments).

I'll speak to the bank about that rescue thingy, and about Equity Release and see if they do it.

sleepless_saver

Sorry to hear about your health problems. SHIP has the best info about equity release if you want to find out more about it, though obviously your equity is less than your mortgage.

I hope you can find a way to keep your home.

Shimrod

SueP1944 wrote: »

Hi Sleepless,

Thanks for that info about the mortgage. We don't have much debt apart from the mortgage.
Credit Cards £3000
Loan £5000

There is a mortgage (including arrears) of £103,000. Minimum equity would be £67,000 (£59,000 after debt repayments) and as much as £93,000 (£85,000 after debt repayments).
.

I don't want to sound harsh, but I would say you do have a lot of debt compared to the income you have described above (Pension credit).
Does your husband have any company pensions that are due when he reaches 65? If yes and it is a money purchase scheme, he should be able to get an enhanced annuity now based on his ill health? If a final salary scheme, he should also be able to get that, although with a reduction for early retirement.

How where you intending to fund the mortgage once he had retired. Based on the fact that it is now £103,000 including arrears I'm guessing that it is interest only? If there's no pensions in place, then I would be planning on selling the house now while you have control, because it seems at the moment that you will be losing the house at some point in the near future due to your inability to pay the mortgage.

For benefits and such like, you are probably best posting your situation on the benefits board (a few down from this one) where you will should get a lot more assistance in getting the benefits to which you are entitled. Good Luck!

Mojisola

Get some help from the Pensions Service. You really should be entitled to some health benefits.

SueP1944

I thought I would bring you all up to date.

A family member paid off the arrears for us on the mortgage. So that takes us back to square one.
My husband has managed, after an appeal, to get ESA.
We are no better off though as they have reduced the Pension Credit.
We are still undecided what to do about the mortgage as we cannot ever see a way of it ever being paid off.
Everything was OK whilst he was working, but not now. At least we are in control and can sell it and not the bank which is a good thing.
If we did and took the equity the Pension Credit would cease as we would have to use the equity to live off and pay rent until it had all gone.
What does worry us is this new pension of £140pw, not that would make any difference really as he will get nearly £170 as it is. But they seem to be getting rid of Pension Credit, so no one will have their mortgage paid anymore.

So things are a little different now than they were 6 months ago.