No endownment anymore, mort joint, wife no pmnt for 10 yrs

jonouk

I am in quite a predicament, the heading tried to encompass the whole situation, I will try to be brief as I can;
First, I bought this house approx 17 yrs ago, but applied with wife so arranged joint ownership, although at the time she didn't actually put any money down. Over the years we had two children, and within the 10 to 15 years past I developed a bad arthritic condition which rendered me eventually unable to work.
All the time I was working I paid the mortgage and the endownment, my wife didn't work, and paid nothing to mort. Eventually approx 10 yrs ago she left me and our 2 sons, (not that I cared at that time really). I was now on disability benefits and income support, and brought up the 2 boys, at that time ages 9 and 11. A portion of the mort was paid for me, I made up the difference.

Unfortunately the endownment lapsed, and was cancelled, I thought it was being maintained but it was not. What options might I have to rectify this situation, does it happen often because of endownment shortfalls, might I be able to release equity to clear the 64k due to the bank?

All through these years, my wife paid nothing to the mort, or even helped in any way, she actually didn't even pay maintenance for the kids, but that is another story.

So in conclusion I have two issues, primarily how am I going to deal with the endownment loss, which of course is used to pay off the mort at end of term, perhaps 9 yrs time.

Secondly,
My wife, (legally we are still married and she entered into a gay relationship) is anxious to have the house sold in order to get a half share, evven though she never actually contributed. I realise the law will recognise she is indeed a joint name, but do I have any defence in her claim? Or is it cut and dried, joint signature = half share. Although I recognize the endownmnent policy issues would have to be addressed first.

Thanks for any advice.:)

opinions4u

On the endowment side you won't be able to reinstate it. Too late. But was there a surrender value? If not, why not?

As for the shortfall, start overpaying the mortgage fast. If you can't afford to sell up and rent ... After taking legal advice regarding the joint ownership issue.

CLAPTON

you need to see a solicitor

Perelandra

opinions4u wrote: »

As for the shortfall, start overpaying the mortgage fast.

I would be a bit careful on this one.

If the wife is entitled to half of any equity in the house, I would imagine that if you overpay you'll be (effectively) giving half that overpayment to her eventually?

Personally, I wouldn't overpay until I'd spoken to a solicitor.

holly_hobby

04U is correct regarding re-instatement - you usually have 12 mths to do so.

It was your duty to ensure prems were maintained, so unless there is something outside of your control that prevented you from doing this - there is no way back with this aspect of your issue, you need to also be aware that when the policy lapsed all benefit of life cover was lost, so you need to consider the fact that if you don't have any existing life cover your dependants would need to sell the property to redeem the mge on your death. (as life cover may be v costly, or even with exclusions, re your medical condition)

Did the policy lapse without value ? If not, may be the time to surrender this.

OK thats the policy briefly discussed.

Marital status

As you are still married, you need to effect (or update) a Will URGENTLY - as without one, your wife under intestacy laws, will be primary beneficiary of your estate on your death.

SO, if you don't want this - do something about it ASAP !

Repaying the mge itself ....

I presume its still interest only, and its still being paid partially by DWP, with you in receipt of the benefits discussed in your first post.

If so you are not repaying any capital under the mge, so when redemption time comes the lender will want full repayment of the orig loan, but with what ? You don't have a repayment vehicle, or substantial savings I guess ...

Can I put the cat amongst the pigeons here ..... sell up and go into rented ... theres nothing to be gained financially by staying where you are, unless you are waiting for a rising market .

If you go into LA housing, they will look to house you in a property suitable to your health condition, and assitance with rent will available subject to any means testing calc.

If following sale of the property there is a shortfall, the mge lender will chase you and Mrs for up to 12 yrs, but most will be quite happy to come to a repayment schedule.

Assuming this isn't a pleasant idea ... Lets cover the fact that you are talking about releasing equity from the property to repay the bank (whom have your existing mge I presume). Any mge application will be based on your income - and on your current status I'm not sure how that would pan out multiple wise re income solely from benefits ..... ideally any mge would need to go onto a repayment mge (so that at the end of the term there is no mge balance os so that you have security of residence for the remainder of your yrs). Saying that why don't you change the current to repayment (although you will only get DWP assistance re the interest), as otherwise you are just shifting sand i.e simply swapping the current mge from lender to another ... it doesn't make sense. Although there is a lender in the market who offers a residential interest only mge arrangement, with no max age at redemption (max mge term of 40 yrs) - could this help ?

I am guessing that you are too young for an equity release lifetime mge (min age 55), the % release also based on the value of the property. Could this be an option ? (of course any new mge in your single name will involve a transfer of equity with the Mrs)

Firstly ... see a solicitor .. get a Will written fast, and obtain some family law advice re the situation you and your children find yourself in.

Secondly ... find out if your endowment has any surrender value.

Thirdly ... see a whole of market mge adviser .... take details of all your DWP benefits, os mge, and any sv value of your endowement, to enable them to evaluate what options you have, once you know what the family law situ is from your Solicitor.

Its time to get proactive with this .... Monday morning you know what you need to start putting in place.

Finally, don't forget we are all here to help and support you as much as possible - so don't feel you're on your own in this. (sorry to other readers for the lengthy post !)

Hope this helps

Holly

jonouk

Well thanks very much for all the input, in particular from Holly Hobby. The post was much welcomed, I didn't realise there was so much involved. Anyway briefly, the endownment policy lapsed years ago, probably 5 years into the mortgage, that coincides with the time the family was in a turmoil. My ankylosing spondilitis was getting worse, and my ex was in a terrible mood all the time, which culminated in her leaving us to move in with her girlfriend. It was very stressful, and of course stress is very bad for arthritic conditions, it got worse quickly, and I also managed to be involved in a car wreck which wrote the car off, fortunately I was on my own at the time. So, I believe there was some payment from the endownment, but it was very little, a few hundred or so. As for my age I am actually 53, so you are right, but only just, so perhaps that is an option. Despite the split from my wife, we are actually on a fairly good footing. We had a joint interest in the children's welfare, and education. They both now have degrees so at least that came right. I always thought of passing the property jointly to them, so I will sort out the will asap. There is good equity in the house thankfully, the mortgage is 64k, and the current values of houses in this street are around the 200k mark. The house has in fact been improved for my residence, a downstairs bedroom and en suite shower toilet extension provided by social services, so in fact the value has been probably increased. Not that I want to up sticks and leave. What is probably true is that my ex might be generally agreeable with potential changes, although I know she would like some portion, she shares the idea of the children inheriting the house in the long run. We are not enemies. So I really need to sort out life insurance, which as you say is going to be difficult given the nature of the disability, and no I don't have a large savings tucked away. Bringing up 2 kids makes saving virtually impossible. I will get moving on this monday, Once again thanks very much.

holly_hobby

Oh, you are so very welcome .... just sorry that your post was needed.

Ok - there is no endowment - so there is no repayment vehicle, which means at the end of the mge term 64k will need to be provided to your current lender.

You are currently too young at 53 for any Equity Release lifetime mge arrangement - which in essence has interest rolled up onto the debt (eroding free equity), or at 65 you would be suitable for a home reversion scheme were a % of equity in the property is sold - again this will affect the inheritance you wish to leave your children - so I don't believe this is the answer to your problem (unless your children are happy not to restrict your options by wishing to benefit from the house ? ).

The best bet to give the best chance of leaving the property in tact for your children would be to effect a repayment mge - whereby at the end of the term the mge is entirely repaid. Obv with this method, if you die mid term there will still be an element of os debt for your estate to settle - and your current DWP contribution to your mge may be affected by any change of lender, and will only relate to the interest element of the mge in event - so your outgoings will increase with this arrangement (but you may qualify for higher means tested benefits). You need to have a chat with DWP to ascerain the situ re the current assistance, and any affect of your changing lender and repayment method.

Alternatively stay with an IO mge - but repay lump sums where possible, and save hard (maybe your children could help), to afford you the opportunity of repaying the 64k mge by/at redemption.

An option to this could be to consider the one residenital lender that allows IO and does not have a max age at redemption (meaning your being 53 and being term restricted due to your age, would not be an issue). They have a max term of 40 yrs, essentially meaning that you could run your mge for a longer period, to give you a greater opportunity to repay the 64k within its term - subject of course to they accecpting your source of income and you being disciplined enough to reduce/save/repay as reqd - mindful that if effected the max term now, you would be 93 (and hopefully still here) when redemption occurs.

Obv estate protection on your death before the end of mge, would be addressed by life cover, which will no doubt have exclusions relating to your illness and/or a premium loading, of course when the time comes, (as it does for us all), it may have no connection with your condition and payment under the plan duly made.

As I said earlier, apart from the Will (as you are not divorced please address this urgently) and Family law issues, you need to sit with a good independent mge broker who can think os the box and factor together a suitable solution for you (inc life cover options/requirements).

Sorry for another lengthy post, but trying to give you as much info as possible so that you are not blindly going forward.

Hope this helps ...

Holly