signing over a house/mortgage

nikki001

Hi, my mother in-law is struggling to pay her mortgage and will lose her house soon. If she signs the house/mortgage over to her son and daughter will they be landlords/ladies? Would she have to pay rent and would they need to take out any landlord insurances etc???

mrcow

It's up to them whether they charge rent or not. They don't have to.

Are they paying her for the house? If there is equity, it's her money. She should seek advice before she gives it away.

go_cat

They would have to apply for a mortgage - are their incomes sufficient for the value of the house ?

nikki001

Thanks for replying.
This is what worries me. Their mother will just sign the house over to them, so she will not get any equity. Their plan is to not charge her rent so she can get back on her feet financially. However after a year they want to sell the house because they won't be able to keep it on forever, which she would know about when she signs it over to them. This does not sit well with me at all, I know she would live there for a year rent free, but I'm just not sure about it all.
She did own the house ought right, but she got back together with their father who conned her into putting his name on the house (no money was exchanged). He then borrowed £68,000 out of the equity in both their names (houses current value is £80,000) and then left her. She doesn't have the money to pay the mortgage and he has not paid it for the last 3 months. He doesn't care if the house is taken back by the mortgage lender because he doesn't live there.

Person_one

Why don't they just give her some money towards her mortgage payments for a bit if they can afford it rather than turfing her out of her home?

getmore4less

Did she sign and agree to the loan?

saverholic

You might be best re-posting this in the 'House Buying, Renting & Selling' board. The guys there probably know more about the legalities involved.

Good luck

System

If she is joint tenant with the father then she can not sign the house over without his consent. Any solicitor worth their salt would not get involved if there was no resolution available for the outstanding mortgage.

Mr_Toad

!!!!!! wrote: »

If she is joint tenant with the father then she can not sign the house over without his consent. Any solicitor worth their salt would not get involved if there was no resolution available for the outstanding mortgage.

Absolutely right.

You can't just sign a house over, my ex and myself have tried. We split five years ago, at first I lived in our home and paid the mortgage and she wanted to take her name off the mortgage so she could buy a house.

The building Soc. won't do it. Why should they, with two names on the mortgage they have two people to chase for the money if needed.

Two years ago the ex and her partner were looking for somewhere to live and I said they could move into the family home and I'd move into an apartment, the house was way to big for me and the cat. She now pays the mortgage on the house.

This time we tried to take me off the mortgage but again no joy. The only way is to get a new mortgage in one or the others name and to do that the Building Soc. require a huge deposit, it's a big house and worth a fair bit.

alleycat`

nikki001 wrote: »

Hi, my mother in-law is struggling to pay her mortgage and will lose her house soon. If she signs the house/mortgage over to her son and daughter will they be landlords/ladies? Would she have to pay rent and would they need to take out any landlord insurances etc???

As people have pointed out, she can't just sign it over if the property is mortgaged.

The mortgage company would have to make an assessment of the people taking on the property, such that they can afford to borrow what is outstanding and meet any Loan to Value criteria.

The mother would be making a gifted deposit of the value of the rest of the house (probably).

There will probably also be a lot of legal issues with regards to deprivation of assets and Tax should she die or require Welfare help.

If the Sons and / or Daughters can afford to pay the mortgage in the short term then that is the best recourse.

Make sure she has a proper Statement of Affairs (to show when she'll be sorted out) and make her stick to it.

I'd expect she'll have a crushed credit record and possibly be in arrears to some degree (that needs ironing out as well).

It is important for the MIL to be very clear about where everything is and what she can really afford.

The kids do not want to take something like this on blind as it could be a huge money pit.

The other alternative is they pay the mortgage until it is sold and then take back an agreed amount from when it is sold (should they so wish).

I'd recommend the Mortgage Board and the Debt Free parts of the forum as well.

My 2 Cents.

Edit:-

I missed the part about him drawing down on the house.
He can only have done that if she signed the paperwork.

If you are saying the MIL did not do this then fraud has occurred and she needs to involve the bank and the Police.

Did she actually sign the paperwork or has he forged her signature?
I'm fairly certain you cannot borrow money on a property that is wholly owned in multiple names (with a single signature).

fluffnutter

You can't 'sign over' a mortgaged property else we'd all do it to avoid paying stamp duty!