my blind 91yr old disabled mum will have to move

vinnymyboy

My mum moved from bournemouth to be nearer to me, so i could look after her and she can remain independant, we took out a buy to let mortgage just before the crunch and are tied in at 5% mortgage until 2015, I am aying £580 er month towards the house and the ension credit service has been paying her share of an equal amount, she has no savings and has qualified for a stair lift and a disabled bathroom, in qualifying for these she signed a contract where she cant sell the house without a penalty being incurred both for the disabled facilities {5 years ) and now the government has changed the maximum amount they will give her towards her costs,from 5% down to {approximately) 3% its dropped from £142 per week to £85 per week, this means we have to find another £249 each month, I cant afford this as i am already paying as much as i can, she cant afford it from her pension. the mortgage company reminded me that if we sell the house there will be a £12000 penalty plus the £13000penalty for the stairlift and bathroom grants , can anyone help or give us some advice as to what to do, she is very frail and couldnt cope with another move at her age. can they really pull the plug on her like this

dunstonh

the ension credit service has been paying her share of an equal amount

I'm surprised they are paying anything to be honest. The investment property should be included in the means test.

she has no savings

She does have an investment property though and that should be declared as such.

can they really pull the plug on her like this

The pension credit means test pays amounts based on her financial position. As that changes over time, the amounts paid will change as well.

Getting a 92 year old onto a higher risk transaction with an illiquid asset at the time the market was known to be in a bubble was almost certainly not a good idea. Especially if you dont have much of a budget to being with. i.e. you only have to find an extra £249pm but your cant afford it. What are you going to do in future when interest rates are higher?

The damage was done a few years ago and that cannot be undone easily now.

How much equity is in the property if you take the early repayment charge hit and sell up now?

It's probably a good idea to pop over to the debt free wannabe section. They are very good in there at helping people who have got themselves into a bad debt position like yourselves.

themull1

Did you use her previous house/savings to buy a buy to let to let her live in until she dies, then the house will be yours?

bigbigmamamoo

I'm a bit confused. Are you saying that you took out a buy to let mortgage to buy the house that you and your mother now live in?
Or do you own another property with a buy to let mortgage?

WhiteHorse

Where is the mother actually living? And how was/is this funded? You have told us that she has moved out of her house and that she does not live with you.

margaretclare

You write in very emotive terms, but I don't think anyone has deliberately set out to 'pull the plug' on your mother in the way you depict. In case you hadn't noticed, since the election there is a programme of spending cuts right across the board and while I'm normally very sceptical of anything politicians say, I do believe what was announced recently by one senior politician that 'every one of us will feel the pinch, no one will be exempt'.

I don't understand why you chose to do this for your disabled mother. Wouldn't she have been better off in sheltered accommodation which might have had a disabled bathroom to start with and wouldn't need one to be installed, and might have been on one floor therefore not needing a stair lift? These two are very expensive items and one might realistically say, how long is she going to be able to use them, to recoup the cost? Less than 10 years maybe?

I think you've made a series of wrong decisions and wrong choices, as dunstonh outlines above. I don't know what your options are.

mitchaa

vinnymyboy wrote: »

My mum moved from bournemouth to be nearer to me, so i could look after her and she can remain independant, we took out a buy to let mortgage just before the crunch and are tied in at 5% mortgage until 2015, I am aying £580 er month towards the house and the ension credit service has been paying her share of an equal amount, she has no savings and has qualified for a stair lift and a disabled bathroom, in qualifying for these she signed a contract where she cant sell the house without a penalty being incurred both for the disabled facilities {5 years ) and now the government has changed the maximum amount they will give her towards her costs,from 5% down to {approximately) 3% its dropped from £142 per week to £85 per week, this means we have to find another £249 each month, I cant afford this as i am already paying as much as i can, she cant afford it from her pension. the mortgage company reminded me that if we sell the house there will be a £12000 penalty plus the £13000penalty for the stairlift and bathroom grants , can anyone help or give us some advice as to what to do, she is very frail and couldnt cope with another move at her age. can they really pull the plug on her like this

Who is pulling what plug?

This to me looks like you have bought a property solely for your own financial interests. You added your elderly mother to the mortgage which then enabled her to apply for mortgage assistance in order for the government to pay half your mortgage. Let's be honest, when your mother passes away, the house is 100% yours.

The government have been paying part of your mortgage and due to the interest rate being way out of line with reality. (Currently 6.1% even though BOE BR has been at 0.5% the last 19mths, they are now rightfully reducing this to 3.7% next month)

Just how did you ever pass the mortgage application process with such an elderly buyer? Surely you must have realised at some point that your mother is very elderly and is not going to be here forever? Just how will you pay the £1160pm when your mother, dare I say, passes away?

I think this is only the start of your problems to what clearly is not a very well thought out plan.When the inevitable does happen, are you likely to secure a decent rental rate that will enable you to keep hold of this property?

ColinJS

I sincerely hope you didn't get advice from an IFA for this one. I feel for you, but have to agree with previous posts. Ill-conceived and very high risk strategy.

I suppose an option would be to move her in with you and let the house to a third party to try and cover more of your costs.