Transferring mortgage

Heffi1

Hi,

I am not too sure if I will explain things correctly so please be patient if I wander off topic a bit.

I live with my mum in her house, my dad and mum bought their council house on the right to buy scheme in 2007, my ex husband stood as guarantor as both my parents were retired.

Dad has since died and so house is solely in my mums name, I got divorced. ex contributes nothing to house.

I would like to be added to the mortgage as I am the wage earner and my mum is now 71 and not getting any younger.

My sister has in the past mentioned that she would be entitled to half the house on my mums death, even though she does not live in the house or contribute to its upkeep, I do that.

I am currently in a DMP (since 2007) with numerous defaults which are due to expire during 2014, so I was wondering once they have dropped off my credit file, how easy would it be for us to remortgage the house with me being added to it.

Currently we are with Halifax and I asked the question last year to be told with defaults there is probably no chance for getting me added to it.

I am concerned with my mum getting older, no plans in place i.e. a will leaving the house to me, she cannot make her mind up !! My sister sniffing round and me and my son having lived here for the past 7 years being turfed out when the day comes.

How do I protect myself, without depriving my mum of anything, she will continue to live with us by the way.

I heard something about passing the house to me, with her paying rent for 7 years, but not sure of the details, so this would need to be investigated properly if it was in fact an option.

Would I need to raise a deposit for the mortgage, even though we live in the house?

I am completely clueless so any help anyone can give would be a bonus.

Many thanks.

holly_hobby

You can't protect yourself as such, as Mum is the property owner, so its up to her to whom her assets revert to on death.

Once your credit record is clean, then you could simply reapply to Halifax to be added to the mge and deeds (called a transfer of equity,cosing circa £500), and is subject status of course.

If you instead choose to remortgage then this would be a simultantous Transfer of Equity and remortgage, and whilst your Mums age may restrict the maximum term (which most lenders cap at her 75), if your income covers the mge completely, there are several lenders whom will consider basing the max term on your age.

No you won't need a deposit under a remortgage application (as long as the property values up ok, and the reqd mortgage is within acceptable loan values etc) ..... I would recommend a broker to assist.

So, the first thing for Mum to do is make a will, as if she fails to do this and dies without one (which is referred to as dying intestate), her estate (following the discharge of all debts), and if there is no suriving spouse, will be equally divided between her children ie you and sister.

The other issue you have, is if Mum dies before you are added to the mge and deeds, and if there isn't sufficient capital in her estate to settle any outstanding mortgage (ie no life cover etc), you will either need to raise you own mortgage to effectively pch the property from the estate, or the executor may need to sell it to a 3rd pty, to completely discharge the outstanding mge....

The 7 year and her paying rent, is all to do with Inheritance Tax - and unless the net value of her estate will exceed available nil rate band (upto 650k if her hubby died without using any of his exemptions), which it doesn't seem it will, then you don't need to worry about that (of course if Mum comes into capital to change this, then the above guidance will need to be reviewed).

Few basics, which I hope gets the ball rolling ...

Holly

Heffi1

Holly,

Thank you for such a comprehensive reply it gives me lots to work on, I appreciate your time.