Mortgage sold to pensioner with Alziemhers

distraught_daughter

A while back my Mum was widowed, a few months later she was diagnosed with Alziemhers. In order to care for her we sold our old house and used all the capital to buy hers. That had to be purchased in her name because she was a council tenant and it had to be in her name to qualifiy for the "right to buy" discount. The house was paid for in full it's value was 135,000 We planned to get a mortgage to pay for an extensuion to provide her with independant but supported living space. But as the property was in her name the mortgage hd to go in her name too. We didn't mind as at the time we were told when she died (and we more or less knew she would not live to repay it as it was over 25 years she was 74 and the average lifespan of a AZ sufferer is 7 years after diagnosis, which again was explained to the adviser) we would be able to take it on and it would be a simple administrative procedure. It was a repayment mortgage for £29,500. We were on benefit at the time because of disability. We actually paid the mortgage installments and the company concerned said thay had no problem with that so long as it was paid. We did this so that my Mum had no interest as such in the property so if she needed nursing care we would not have to sell the house to pay for it - this was on advice form our local council. Last year an old endowment matured and we paid a £4,000 lump sum off the mortgage. The DWP would not help us with repayment while Mum was still living in the house which was ok, we were able to make the payments ok. Mum died in December and the DWP said we were now eligible for the interest to be paid by them. The house was left ot me in Mum's will and we went to the lender to see about transferring the mortgage BUT they said we could not do that as we were on benefit, even though in many contact we had ahd with them in the past such as when we obtained an EPA and later registered it, and when we made the lump sum payment and each time we always went through what the long term plan was. So now we can not get another mortgage form another company as the deeds are in my Mum's name, but the company are saying it can not stay in her name.
We have a further 10,000 we can pay of from her estate but that leave us with just over 11,000.
If they had simply refused to sell her the mortgage we would now be in our old home with it all fully paid off. Surely they can not realistically have expected a 74 year old woman with Alziemhers disease and an eduring power of attorney in place (copies were given to them) to be capable of living long enough to repay that mortgage? They are telling us now we can can't have a mortgage because we are on benefit but so was she, she had a state pension, attendance allowance and very small private pension. In hindsight I thinik it was mis-sold, but becuase we were told we could take it over we encouraged her to accept it, now we could end up losing the house.
My husband get's DLA and I am a registered care we thought these benefits were supposed to be part of the calculation.
What do others think, am I right about DLA and carers allowance as this would help.
I am desperately seeking work to help resolve this
Thanks for any thoughts/advice

Simon_gloster

You have to have some form of income (emplyment) to obtain a mortgage. Your mum would have had pension income and it seems this would have been enough to get the mortgage.

As for the term of the loan, depends on what lender it was, but if there was EPA, the lender seems partially covered.

Lendinh policy can change at any time, when they like and can be driven by social forces.

The lenders who do take benefit into account will at most use 60% of them. Relying on the state to pay a mortgage will not seem attractive.

You may find a non conforming lender to help as it sounds you need to borrow little against the value. Seek a broker for help.

kingstreet

So the current mortgage was mis-sold because the lender won't now give you a mortgage?

I don't know any lender which could, or would, commit itself to an open-ended commitment to lend to you (at an unknown future point) when the current mortgage was granted.

Criteria changes and that's what's happened here. The entire lending market has changed and sadly, mortgages aren't as easy to come by as they were.

Your post says the property was paid for in full, £135k, but in the previous line it had to be purchased in her name to qualify for the RTB discount. So which was it?

Do you want to try to find a solution, which may involve raising another mortgage, or do you wish to continue the "mis-sold" line?

Assuming the former, what's the property value? Is it still in the pre-emption period? How much is outstanding on the old mortgage?

GMS

So you purchased the house for cash in your mother's sole name? You then took out a mortgage to fund works to the property again in your mother's name?

At the point of taking the mortgage could you not have been added to this? Did the lender make your Mum take Independent Legal Advice?

DVardysShadow

Mis-selling? To a pensioner with Alzheimer's?

Where your plan went wrong was that your plan did not take into account the possible need to keep her propped up in her armchair until the mortgage was paid off. It is your plan which was wrong. And I think that you would do best to accept that and not waste time on an ill conceived mis-selling claim.

The_J

I don't see the problem.

1) If you hadn't borrowed the money to do an extension you would be living in the property now.
2) Sell the property, take the equity from that and buy somewhere that doesn't have said extension.
3) Wait until mortgage market recovers or you get some decent income, borrow mortgage and build extension.

Easy.

MonkeyMad

You bought the property in someone elses name to secure a discount from your local taxpayers so some would argue that it's a bit rich to say the mortgage was mis-sold now you can't raise a mortgage for the extension despite you now owning an asset worth more than you paid for it.