Endowment Mortgage comeing to end ... no endowment policy and no job!

xylophone

I wonder would it be possible for father to sell and for you and him to buy a place as tenants-in- common (or whatever the equivalent is in Scotland)? Perhaps you could find a place where he could have a little downstairs suite to himself?

uponahill

boobies wrote: »

I also know of people that have been given an extension, albeit by Santander, and every lender will have differing criteria. It is all down to personal circumstances, and the question needs to be asked before assuming the worst.

The OP states that his father is unemployed and sick.
I would be very surprised that any lender would consider him worthy of an extension or remortgage.
And yes I do know that some banks used to take DLA into account.

Given the state of the mortgage market over the past three months I would say he is going to be hard pushed.

Just being realistic

uponahill

Cals72 wrote: »

Hi Boobies - i will phone on Monday and let you know! There is still quite a lot of equity in the house so perhaps they might view it with less risk. Will let you know what they say - thanks for the advice.

Just a heads up. About 4 months ago this happened to someone I know. He had an interest only mortage with the Woolwich which expired after the 5 year term.
Now sick, unemployed and disabled.

House was valued by two independent valuers at £195000/£197000, with £105000/£107000 in equity (mortgage £90000)

They told him to either find another lender or sell and repay the mortgage.
Couldn't find anyone - walked the streets asking everywhere, so he had to sell up via auction for quick sale as was given 28 days to settle. Sold for £156000!!!

No chance of ever owning a property again as permanently disabled and will never work - poor guy is only 49!!

BigAunty

Cals72 wrote: »

I understand what you mean - any views on my proposal to act acting as a guarantor - I am an only child and and the house will come to me anyway and i can sell it when the time comes?

I don't know how this works but being a guarantor is very risky - if you lose your job, how do you propose to pay for two homes, yours and his, for example?

And if your father needs a residential care home, his property will have to be sold to pay for it so you get nothing back.

BigAunty

Cals72 wrote: »

Now this made me laugh - its the thought of a wee grotty flat in Maryhill that has me terrified! His house is in Summerston and i cant see him moving over to the southside with £60K ;0) - thanks for all the advice.

Approximately 300 properties in Glasgow and the surrounds 60k and under.

http://www.rightmove.co.uk/property-for-sale/Glasgow.html?sortByPriceDescending=false&maxPrice=60000&maxBedrooms=1

including some on the Southside (yeah, some say offers over 60k but a cash buyer could tempt a lower price plus you could put a bit in).

http://www.rightmove.co.uk/property-for-sale/property-20007750.html

ooh, Shawlands - look - view of the park and a lift

http://www.rightmove.co.uk/property-for-sale/property-27182273.html

Shawlands again, small but, ooh right by all the amenities.

http://www.rightmove.co.uk/property-for-sale/property-36222743.html

Roomy, for a retirement flat

http://www.rightmove.co.uk/property-for-sale/property-35100443.html

DylanO

He wouldn't have just £60k, he'd also have the £12k endowment policy and the £15k-ish that Cals72 said he had for his father.

If Cals72 could raise the other half of the mortgage payment, he could become part-owner of the property too.

BigAunty

DylanO wrote: »

He wouldn't have just £60k, he'd also have the £12k endowment policy and the £15k-ish that Cals72 said he had for his father.

If Cals72 could raise the other half of the mortgage payment, he could become part-owner of the property too.

I already factored in the 12k endowment policy. He says the property is worth 100k which is a bit optimistic in this climate, but I allowed 95k sale price (probably gonna be less than that), less the balance owed of 46k, less the 12k endowment policy, less the legal and estage agent fees.

It's admirable what the OP is offering to do but ultimately his father has been financially reckless. I know he's been sick for the last 3 years but seems to have stopped paying into the investment vehicle many years before.

Now his son has to hand over his savings, perhaps be a guarantor, perhaps pay off the balance of the mortgage which is actually higher now than 25 years before when the OPs father was presumably in employment for the majority of it (at a guess).

People who can't afford their properties normally downsize or move into rental accommodation, not have their child pay off a mortgage that's higher than when the property was first bought...(though it's sweet that the OP wants to sort it out so his dad can stay in his own place).

Cals72

xylophone wrote: »

I wonder would it be possible for father to sell and for you and he to buy a place as tenants-in- common (or whatever the equivalent is in Scotland)? Perhaps you could find a place where he could have a little downstairs suite to himself?

I think there is something interesting in your idea. Depending on which site i read - housing benefit can be paid to family members if they don't live in the same house. Before I have people screaming at me that I would be using public monies to benefit - the principle would be i purchase the house so he can live in it and only ask for housing benefit to cover what it would need to cover the mortgage. In truth if i can get a second (buy to let) mortgage it would be well below the maximum allowed for a single person. I am going to call Shelter on Monday and explore all the options ... thanks to everyone for their advice.

sunnyone

Cals72 wrote: »

I think there is something interesting in your idea. Depending on which site i read - housing benefit can be paid to family members if they don't live in the same house. Before I have people screaming at me that I would be using public monies to benefit - the principle would be i purchase the house so he can live in it and only ask for housing benefit to cover what it would need to cover the mortgage. In truth if i can get a second (buy to let) mortgage it would be well below the maximum allowed for a single person. I am going to call Shelter on Monday and explore all the options ... thanks to everyone for their advice.

That wont work, you cant claim HB for a house you used to own.

And it would be a contrived tenacy as you wouldnt be charging market rent.

BigAunty

Cals72 wrote: »

... housing benefit can be paid to family members if they don't live in the same house. Before I have people screaming at me that I would be using public monies to benefit - the principle would be i purchase the house so he can live in it and only ask for housing benefit to cover what it would need to cover the mortgage. ...

Yes, if you buy a property, you can let it to a close family member who is receiving housing benefit so long as it's not a contrived tenancy, one set up to take advantage of the housing benefit system. It is expected that it is a formal, commercially operated tenancy.

A contrived tenancy is, for example, one where a family member doesn't pay rent when they are working but does claim housing benefit when they do not.

http://scotland.shelter.org.uk/get_advice/advice_topics/paying_for_a_home/housing_and_council_tax_benefit/housing_benefit_if_you_rent_from_a_family_member#1

However, your father appears to have around 60k capital in the form of equity in the property so isn't eligible for housing benefit if he sells up and you buy him a place elsehere. Means tested benefits are reduced for sums over 6k and cease over 16k.

He cannot make this capital 'disappear' - if he gives away the property or sells it under market rate to qualify for HB he will be considered to have intentionally deprived himself of capital and will be treated as if he still has it (known as notional capital).

And I believe the previous poster is correct when they say that a former owner occupier cannot claim housing benefit in a property they have previously owned. For some reason, I think they can't do this for 5 years. I'll see if I can find a link in the actual regulations.

As far as I can see his options are to sell up and move somewhere cheaper or rent if the lender refuses you paying off his mortgage.