Paying off someone else's mortgage

ITS

Can anyone help with the legalities involved in paying off someone else's mortgage by installments and developing a legal charge on the property in doing so?

I'm due to inherit some money, split between myself and my three siblings. I'd like to use my portion to pay off my mother's mortgage as she's only currently paying interest and will only be able to hold the mortgage for another 12 years until she retires after which she must pay it off. However, I'd like to hold a legal charge on the property for this amount to ensure that in the long run, that money comes back to me and my children, and doesn't get split equally between myself and my three siblings (since they will have already received their share). I could also do with using the money myself in the immediate future so was wondering if I could pay off her mortgage by monthly installments over the next 12 years from our income to ensure that she reaches retirement mortgage-free. If I do so, how can I ensure that I develop a legal charge against the property for the amount I will have paid into it over the years?

If anyone knows or can direct me to a useful source of information I would be very grateful!

McKneff

But in actual fact, you wouldnt be paying the mortgage, you would be lending your mum the money so that she could pay the mortgage off surely.

ITS

Thanks for your response.

You're right, it would be a loan at 0% interest and secured against the property as a legal charge (repayable upon death), rather than a gift. But the tricky bit is that it would be a loan paid by installments. If I paid off the mortgage in one lump sum, I could take over the mortgagor's legal charge on the property but if I pay it off gradually, I don't know how this works.

McKneff

You really would be better getting legal advice.
Are you siblings aware of this, it might be worth talking to them now rather than when the inevitable happens and it comes as a shock to them.

Its amazing how money can split families when money comes into it.

There are pitfalls, it depends on whether you mum will need care of course in later life, houses have had to be sold to pay for care and none of us can see into the future so proceed with care and you and your mum must see a solicitor who specializes in this sort of thing.

Meadows

Better to get your name put on the deeds/mortgage as joint owner and then if need be have something drawn up by a solicitor that enforce your share in the property. This should avoid issues in the future, it could be added to an existing will of your mum's get your mum to make a will laying out details of the % of ownership of the property alongside other things she will leave and to whom.

chirpchirp

Surely you would need to begin with agreeing with your Mother how much the house is currently worth as it possible has some equity in it.

You would then need to see a solicitor and draw up an equity agreement. For example if the house is worth £150,000 and the mortgage is £75000 then you would have an equal share of the property. If the mortgage was 100k on this value house then you could look at you getting 66% of the house. This should be able to be drawn up into a deed.

However, if you were to default this could complicate things and you would need some form of agreement which would need to show how this would be dealt with. I think your best advice would be to see a solicitor as to how to do this.

Would you be having the mortgage transferred into your name as this could prevent the complications but if you already have a mortgage you may find it difficult to reach the multiples needed to have your Mother's mortgage as well.

accidentprone

My husband and I separated and I gave him a large amount of money as a gift for a deposit on his house. He has now started drinking again ( he is an alcoholic) and I am concerned that he will lose his job and the house if he cannot pay the mortgage.
If he does lose his job how can I protect our daughters inheritence? Can I pay the mortgage until he receives a large pension lump sum which is due for payment next year?

Sky_

ITS, have you considered asking your siblings if they are willing to share the cost of paying off your mum's mortgage? 

You'd still need a solicitor to set up the legal charge on the property, but it might, (in the long term,) be a less complicated way of doing things, as you'd all inherit an equal share of the house.  That's assuming your mum doesn't eventually need nursing home care, which would probably eat up her share of the property.

gwynlas

Accident Prone you need to start your own thread in order to get relevant advice.