Small but complex mortgage

oldsmokie

My father and I own his home as joint tenants (not tenants in common). He has just gone into a nursing home suffering from dementia. In the opinion of his doctors (and me) he has lost capacity. He didn't want to put a power of attorney in place and I will now need to apply for a deputyship at the Court of Protection.

I am funding his care home fees pending the decision of the Court of Protection.

As joint owner of the property I would like to move ahead with letting it to generate income to partly offset the care home fees. The property hasn't has much done to it for 20 years and needs a small amount of structural work, a new hot water boiler, new kitchen and bathroom and complete redecoration and white goods. I'm guessing that it will all cost at least £20k and possibly as much as £40k. In its current condition the property is worth about £300k.

My only way to fund these works is by taking out an unsecured loan in my name or a secured loan/ mortgage against the property. I am self-employed with an OKish credit score. I would prefer to take out a secured loan but I don't know if this is possible given that my father lacks capacity. I suspect it isn't but I would be grateful if anyone could confirm. Further does anyone know if mortgage lenders may offer funding where there is are joint owners and one is a deputy for the other?

dimbo61

You need to speak to the lender but I guess! that it will be a problem and you will have problems letting out without Dads consent!
You cannot sell the property without power of attorney from the court of protection and this can take some time.
Speak to your solicitor ( has your Dad made a will?)

oldsmokie

Thanks for your reply. I don't think letting will be a problem as I've already spoken to a reputable lettings agent.

I have no intention of selling the property unless it is eventually needed to pay care fees. I can't apply for power of attorney because my father has already lost capacity. I will apply for a deputyship from the Court of Protection which is similar in principle but the process is more complex and the requirements placed on the deputy are more onerous than those on a attorney.

My question is whether I can apply for a secured loan or mortgage against my interest in the property.

kingstreet

I suspect his age will be the problem.

If the property is jointly owned, it has to be jointly borrowed on. Even if you have PoA, the lender will more than likely have an issue lending beyond age 75.

I suggest speaking to an advisor with extended permissions for lifetime mortgages/equity release.

Let_Us_See

Equity Release/lifetime mortgage will reflect the age of the youngest applicant and not father age.

Options? Either a non-secured loan in your name, or apply for PofA and then either a residential re-mortgage (subject to status and affordability - more information required) or a secured loan.

dancingfairy

The trouble with remortgaing as a residential mortgage is that the OP has said that they wish to let the property. The OP would then have to ask the mortgage lender for consent to let which could be frowned upon a short time after remortgaging.
df

oldsmokie

Thanks to everyone for their replies.

I think I'm going to have to go for an unsecured personal loan.

The alternative is to wait for the Court of Protection and then for a mortgage approval that I suspect won't be possible based on some of the comments here. Given the scale of the fees this will be too expensive.

I might as well proceed down a path that I know will work.