Diagnosed Terminal need HELP! Transferring Mortgage to daughter

Angeleyes1

Hi everyone,

I'm in need of some advice so I thought where better than to come to this forum so, I've got everything crossed that you may be abe to help or advise me on the best route to take.

My mother has recently been diagnosed with a terminal illness which has come as a massive shock to all concerned. Our family consists of me, my mum and my little sister. The last 2 weeks have been somewha of a whirlwind in trying to come to terms with everything but being the oldest I have had to don my practical head in order to get my mums affairs in order.

Unfortunately, due to money problems my mum cancel her life insurance (last year) and has accumalated various debts over the years which have ended up being secured against her mortgage on the house.

The timeline for the illness is 6-9 months and I'm trying to take as much pressure from her as I can. One of the thoughts that I had was whether my mum would be able to transfer her mortgage over to my little sister (I already have a mortgage), as my sister lives with her but is worried where she will end up even though she can live with me. However, I didn't know what the legalities were of doing this and also whether my sister would end up taking over the debt as well.

Our other option is to rent my mum's house out but I don't now how this would work if my mum isn't around. I've offered for my mum to come live at mine so I can take better care of her and that looks as though that will happen in the coming week, thus allowing us to potentially rent out the property and cover her mortgage payments. I'm unable to cover her and my mortgage as I was recently made redundant and my sister's job isn't the best paid.

Is it true that the mortgage company might be more amenable to transferring the mortgage and increasing the terms for my little sister and if so, what does this process involve?

I'm sure you'll probably have a million and one questions so please ask them and I'll answer them as best I can.

This is the last thing anyone expected but these things always are. I'd give up everything to have those moments again before we found out but such is life. Managing this and trying to sort things out will ease mine and my mums anxiety, whilst also helping to take my mind off what's going on. Please don't think I'm cold asking these questions, I'm just trying to stop myself from crawling into a dark hole.

Thanks in advance

ilikewatch

I think the first things people will want to ask will be:
What is the value of the property?
What equity does your mother have?
What is the value of the debts secured on the property?
Are any insurances in place which would help pay the debts/mortgage in the case of illness/death.

mildred1978

You can't transfer a mortgage to another person. Your sister would have to buy the house from your mother and go through a mortgage application etc to get a mortgage. So it will depend on her salary/credit reports etc.

molerat

Sorry for your news.

Your sis will not be able to "take over" the mortgage, she will have to re-mortgage on her own standing which may not be possible if she is on a low wage. The debts belong to your mother and no-one else but you mention they are secured on the property. How much is the house worth and how much debt, mortgage and debts, is secured against it ? If there are any unsecured debts the owners may well try to charge against the property. It is a very difficult situation and you should really try to get some advice from someone like CAB.

Conrad

To be frank I suspect a short term secured loan could be better whereby the loan sum is large enough to see Mum through her remaining time, with no payments required but of course this means the estate would be worth less as a result.
This would entail short term bridging, totally non status, no income or other checks needed. Some bridging firms can do such a case be please tread carefuly.

One issue to be overcome would be whether Mum is in a fit mental state to sign such a commitment - is she ok in that regard?

Angeleyes1

Thanks everyone for all your responses.

I've managed to ascertain from my mum what is owed against the house.

House is worth - between £120,000 - £130,000 (the house is in a state of disrepair so may only be worth £120,000)

Equity - £15,000 (not much equity as my mum has remortgage)

Debt secured against the property - £16,000

This isn't ideal as you can see and if anything worse than I thought but these are the facts. My mum hasn't got any other insurance either to cover illness/ death. She cancelled her life insurance 10 months prior.

I hope this additional information helps in the advice your able to provide.

Thanks again.

maninthestreet

There is no equity in the property - in fact, it's £1000 in negative equity, based on your figures.

Pee

I would suggest that your mum lives there and continues to pay the mortgage as best she can with your little sister planning for a future where she moves out.

If you mum leaves a debt of £1000 that will be fine. Noone will have to pay it. Equally if it was £25,000. However if your sister or you wanted the house out of the estate you would be paying the debts to get it - not worth it in my opinion although this is entirely practical and not at all emotional.

How old is your sister and is she working?

molerat

Unless sis can come up with a deposit and mortgage she needs to be concentrating on finding somewhere else to live. A temptation would be to sort mum out with somewhere and throw the keys at the mortgage company. That said my mum was given 6 months and lived relatively happily for over 2 years so some problems could be caused with that approach. As I said in my previous post, CAB.

Mojisola

Angeleyes1 wrote: »

My mother has recently been diagnosed with a terminal illness which has come as a massive shock to all concerned.

Depending on her age, your mother will be able to get DLA or AA under the special rules.

https://www.benefitsnow.co.uk/special/dlaterminal.asp
https://www.benefitsnow.co.uk/special/aaterminal.asp

holly_hobby

Hi there,

How absoutely awful for all of you ..... we will all give as much practical assistance as possible, and are hearts go out to you x

Ok, lets try and give you some help and look at the legal aspects of Mum's mge and o/s debts (secured or unsecured).

When anyone passes, their estate is liable for repaying all os debts of the deceased - when the monies from the deceased's estate are exhausted, then that it is there can be no further payments made - with all os liabilities effectively written off by the creditors, as there are ho alternate parties to lawfully pursue.

So, think very, very carefully before you start selling houses, paying off Mums debt etc, etc ... if you get my meaning !

Some great advice already given re sourcing what financial assistance will be avaiable (inc carers allowance), unsure what the health issues are, but taking a punt (forgive me if I am wide of the mark), but Macmillan Nurses are fantastic and will give not only personal help and support, but can also give guidance on financial assistance/management.

Its already been said here, that a prognosis timeline, is a guidance - and in many instances individual resliance and care can effectively dismiss such estimates .... god willing (and if of benefit to your Mum) this can occur here too.

Renting Mums house out will need consent to let of the lender, and when the time comes, it shall need to be sold to redeem the borrowings (tenants vacated), again must stress that any shortfall on disposal, will be effectively absorbed by the lender (if no other capital available from the estate to settle this debt).

You will also need to conisder any funeral provision, and how this will be managed if no term assurance held by Mum (sorry I know its not nice, but it does need to be voiced to prepare).

CAB are a great source of free advice too .... I'm sure I've missed something ... I'll pop back if it pops into my head .. but others will give comment in the meantime.

You are being practical and organised, and trying to arrange matters with the notice you have - which is to be commended and your Mum must be very proud of you - and we are all here to help and support you as much as possible.

Holly xxx