Equity release Mortgage Question

cb1979

My mother who is in her mid 80's is going to have to go into a care home
She owns her own house and took out an equity release with Northern Rock 9 years ago,which with interest is now about 25% of the market value of the property
To fund some of her care we have decided to rent her house out.

The question is do we need to inform Northern Rock of our intention to rent her house,and would they insist we sell the house to repay them as Mum is no longer going to be living there
For obvious reasons I do not want to contact them to ask the question

Thanks

holly_hobby

Check the mge T&Cs - BUT - ordinarilly under a lifetime mortgage, the mortgagor has a lifetime right to reside in the property until entry into longterm care, or death (whichever occurs sooner).

To answer your other question, yes if you were to let the property the mortgagee (lender) must agree, and under the terms of a lifetime mge I would usually expect them to refuse.

With regards to Mum's circumstances you may also wish to look at effecting a Lasting Power of Attorney (LPA)- a Solicitor will be able to assist with this matter (if not already addressed and she is determined as being able to effect the authorisation).

Sorry if this blows the plans a bit .. but hope it helps the planning process ..

I wish your Mum well x

Holly

cb1979

Thanks Holly
You have just answered my question
I will have to look through mums Northern Rock papers and read through the small print
We have a LPA in force,did this earlier in the Year

Thanks Keith

holly_hobby

Well done Keith ... if you need to sound anything else out, you know where to come....

H x