Borrowing money to pay for care

gizmo111

If the relative put a charge on the house then it would have to be repaid on the sale of the house before anything else.

Fire_Fox

gizmo111 wrote: »

If the relative put a charge on the house then it would have to be repaid on the sale of the house before anything else.

This was my thinking too.

rachbc

my PIL leant her mother money and had a charge against the house - this was repaid on her death before the estate was divided and the same would have happened had the house been sold for any other reason. If the person loaning the money were to buy a share of the house this would mean the house couldn't be sold to pay for care and could therefore likely be considered DOC/

sleepless_saver

You're probably better up on the relevant benefits than I am, but is there any way he can get direct payments?

Otherwise the relative loan and charge on the house sounds like a good idea (as long as the amount which will be in his bank account when the AIP ends isn't large enough to affect his pension credit).

ETA: the best way to find out the local authority's attitude to the charge would be to ask them, and get a written response. You'd hope it wouldn't be a problem, as this is money being used to help keep him out of residential care...

Mojisola

sleepless_saver wrote: »

You're probably better up on the relevant benefits than I am, but is there any way he can get direct payments?

I don't think so because his needs are seen as "needy" enough but he is about to have a reassessment by SS following my Mum's death so I will ask them what's possible.

Otherwise the relative loan and charge on the house sounds like a good idea (as long as the amount which will be in his bank account when the AIP ends isn't large enough to affect his pension credit).

I thought it would be best to give lower amounts as needed rather than one big lump sum. He's well past the age any of his family have lived to so we're trying to keep him where he's happy and let him enjoy his last few years - as much as he can after losing Mum.

ETA: the best way to find out the local authority's attitude to the charge would be to ask them, and get a written response. You'd hope it wouldn't be a problem, as this is money being used to help keep him out of residential care...

I think I will have to do this. I haven't found anyone else who has had direct experience of what we're proposing. It does sound as if having written evidence of the loan and a charge on the property is the way to go.

paddedjohn

The LA disregard £23,250 of the value of his property IF he has to go into care so why not lend this amount from the relative and put a charge on the property to secure it.

margaretclare

If you ever did decide to go down the equity release route, make sure the interest is fixed at the current Bank Rate, which is historically low and is hardly likely to go any lower.

The interest rate on our equity release is extremely low because of the low BR. It was high-ish when we started 9 years ago but then the BR went very low and has been low ever since. We were guaranteed that the rate wouldn't rise beyond a certain point and that we'd have security of tenure for as long as we want to live here. It has been a pretty good deal for us because we didn't want to go on paying a repayment mortgage and pay it all off when we're 83 just in time to die and leave it to someone else. Since then, with no mortgage, we've acquired something else - savings!!

Mojisola

margaretclare wrote: »

If you ever did decide to go down the equity release route, make sure the interest is fixed at the current Bank Rate, which is historically low and is hardly likely to go any lower.

Thanks. I'll have another look at equity release. I've been put off the schemes by some horror stories I've read.

We've got about a year before something has to be done but I'd rather do the research now than have to make a decision in a hurry. My own health problems mean my brain doesn't always function well so I try to get things sorted out in my own time. If I have to make the decision in a hurry and I'm going through a bad patch, I might make the wrong choice!

sleepless_saver

" I thought it would be best to give lower amounts as needed rather than one big lump sum. He's well past the age any of his family have lived to so we're trying to keep him where he's happy and let him enjoy his last few years - as much as he can after losing Mum. "

How would the lower amounts as needed approach tie in with a charge on the house? Would it not mean more than one charge? There will be associated costs each time, and on the discharge of each charge as well.

sleepless_saver

paddedjohn wrote: »

The LA disregard £23,250 of the value of his property IF he has to go into care so why not lend this amount from the relative and put a charge on the property to secure it.

The local authority has to disregard the charge on the property as well as the £23,250. (April 2010 CRAG guidance 6.014)