Help: Can I help stop my father-in-law losing his house?

BigAunty

iain999 wrote: »

...

Sounds like lots of reading to try and understand all the options available.

Yeah, but the main one is to get a full picture of his liabilities - I expect he feels a bit panicky and humiliated about his situation but now is not the time for him to hide information.

Murgatroyd21

Not necessarily the best option, but can't the family who stand to benefit in the long run look to help?

Dunroamin

He could sell the house and use the equity to buy something smaller/cheaper/a flat.

Notmyrealname

Murgatroyd21 wrote: »

Not necessarily the best option, but can't the family who stand to benefit in the long run look to help?

Indeed. The interest on a £28k mortgage capital balance is likely to be in the region of £25 to £30 a week. I would personally be quite happy to pay that out of my own pocket to keep my parent(s) in their home.

millym

Sorry to hear about your uncle's situation. He needs to fully disclose his financial situation to you before you make a decision though.

I agree that he should claim DLA, as this isn't means tested and won't affect any income or benefit entitlement in the future other than to (possibly) increase it. Unless they change the rules for this too...

One thing to note though is that he has to get it before he turns 65, so he should apply ASAP. It doesn't matter what illness he has, it's about any care or mobility needs he has.

Another option to consider is that he sells his house and uses the equity to build an annex/extension/garden room onto your house. This would give him his own space, whilst allowing you to be on hand to help him, if not now, then in the future.

honey10

Can I ask, I haven't managed to figure it out from the OP, but why is your FIL losing his home?

He should be entitled to DLA because of the cancer (sorry to hear about that btw) which would help with the mortgage.

Notmyrealname

honey10 wrote: »

He should be entitled to DLA because of the cancer (sorry to hear about that btw) which would help with the mortgage.

You don't get DLA because you are ill. You only get DLA based on care and mobility needs.

BigAunty

Notmyrealname wrote: »

Indeed. The interest on a £28k mortgage capital balance is likely to be in the region of £25 to £30 a week. I would personally be quite happy to pay that out of my own pocket to keep my parent(s) in their home.

But what about the capital repayments, too? Paying the interest only element just makes the debt remain at a static level so no progression in getting the loan paid off before the term. It's not really clear how long the remaining term is - talk of 5 years, so though the debt isn't particularly high for a mortgage balance, there is time pressure to satisfy it.

Such as a shame that interest only mortgages are allowed - we are seeing a slew of identical issues on this and the housing forum of elderly parents approaching the end of their mortgage term with very limited chance of paying it off, leaving their children to try and head off the crisis.

GreyQueen

iain999 wrote: »

Hi,

I'm really hoping some informative person can help me understand if my father-in-law is able to claim any help/benefits to stop him losing his house. Thanks in advance for reading.


Trying to cut a long story short, here are the key points:

• Bought his council house in late 90s.
• Reaches retirement age September 2012.
• £28,000 left to pay on mortgage.
• Only paying interest on mortgage at the moment.
• Currently has Prostate Cancer and recovering from Stroke which happened over a year ago.
• Working reduced hours for a while now due to stroke and can only afford to pay interest only on mortgage.
• Currently receiving pension from previous employment (i.e. took it early) as he couldn't afford not to.
• I think he has credit card debts as well but no idea if they are substantial or not. Possibly they are.

As he has no realistic way of working the hours required over the next 5-10 years to pay of £23,000, he has a massive problem to face.


Possible options I can think of:

1. Give house back to Council and start paying rent again.
2. Sell house for something between £60k/£75k and possibly move into a Council house.
3. Sell house to one of the dodgy companies that promise to let you stay in your house until you die.
4. Find a way to try and pay off his £28k debt.

Firstly, are these options valid and secondly are there any others???

For option 1, he is basically throwing away the equity in his house and paying rent again. I'm not even sure if he can afford this when he retires, however possibly other benefits are available to him at this time???

For option 2, downside is that he needs to move out of the home he has stayed in for all those years however at least he has money in the bank to help him with his retirement.

For option 3, I can see this a horror story in the making.

For option 4, I have no idea how to make this a realistic option unless he is entitled to help/benefits.

Thanks again for taking the time to read this.

Gosh, this is a knotty one for your FIL and hat's off to you for trying to help.

Councils won't buy ex-council houses back; they haven't got any funds to do this. If he sells it and can pay off the mortgage, he would probably have to rent privately, as if he has much capital he would be considered not in priority need for council housing.

He ought to talk to his local council's housing advisers about what they can do to help at present, and what they can possibly offer in the future. He would never be offered another council "house" as they won't allocate houses other than to families but he might get a flat. He's of qualifying age for sheltered accomodation and he might want to consider that option, given the stroke and now the cancer. If he has capital above £16k after clearing his debts, he would have to pay rent and council tax, but he should be eligible for help once his capital drops, how much help depending on how much his private pension is.

I'd urge him not to even contemplate the sell-and-rent-back type schemes; have seen far too many horror stories about these in the real world.

Your FIL really needs professional help from one of the debt charities asap and he will need to make a clean breast of things. Debt advice is complicated, particularly when there is a mortgaged property in the picture. Time is of the essence here so I hope this gentleman gets some help soon as the stress of this cannot help but make his medical conditions worse. HTH.

Notmyrealname

BigAunty wrote: »

But what about the capital repayments, too? Paying the interest only element just makes the debt remain at a static level so no progression in getting the loan paid off before the term. It's not really clear how long the remaining term is - talk of 5 years, so though the debt isn't particularly high for a mortgage balance, there is time pressure to satisfy it.

Put aside £100 a week.

However the problem is right now, not what happens in 5 years time. And right now, £25-£30 a week from siblings would resolve all the issues. £125 a week would pay off a repayment mortgage over 5 years assuming a 3.5% interest rate.