Debt/Mortgage advice needed!

askeilo

Hello,

I am after some advice on the the next steps I should take to try and solve this dilemma my mother is in
Here goes,
I recently found out that my mother who has 3/4 years left on her mortgage, has an outstanding balance of £154,318.95.

The mortgage is from NRAM, here is a breakdown of the mortgage/ outstanding balances

Term end date current balance

01/06/2018 £71,106.05 Original Mortgage
01/05/2018 £3,970.44 Loan
01/01/2019 £4,462.91 Loan
01/05/2018 £27,498.86 Loan
01/12/2017 £47,280.69 Loan

All the above are interest only, and the loans are secured on the house.
The house in its current state is worth £145k.
My mother has just retired and has a pension sum of £40k, and a monthly pension of £1500.

We would like to keep this house, as it is our family home, and has been for 30 years, So we are trying to figure out how to keep the house.
My only plan so far, is for myself to use the £40k, remortgage the house into my name, or buy the house with this money as my deposit, and then take out a new 20 year mortgage, allowing my mother to still live in the house, and pay off the new mortgage, which would be on repayment with her monthly pension.
I would be a 1st time buyer, and have a salary which would able me to secure a mortgage for a house of £150k
If this is the plan i am going to take then I would wait until a few months before the first loan’s end date, as I cant see a difference it would make remortgaging now. So that would be in roughly 3 years, now in the 3 years we have calculated that my mother could save up £20k from her monthly pension, so we could have an extra £20k to add to the £40k we already have. Would it be better to add this together and then put £60k down for the deposit, or use the £20k as payments off the loans as a monthly ongoing overpayment?

Any help would be greatly appreciated

Annisele

askeilo wrote: »

My only plan so far, is for myself to use the £40k, remortgage the house into my name, or buy the house with this money as my deposit, and then take out a new 20 year mortgage, allowing my mother to still live in the house, and pay off the new mortgage, which would be on repayment with her monthly pension.
I would be a 1st time buyer, and have a salary which would able me to secure a mortgage for a house of £150k

I don't think that plan would work (or at least, I don't think it would work exactly as you've described it).

You won't be able to get a mortgage in your sole name to buy a house that a) used to belong to your mother and b) she still lives in. The reasons are complicated, but they're to do with it being difficult for a potential lender to repossess the house if you stop paying the mortgage - your mother's right to occupy it might come before the lender's right to repossess.

Possibly you could get a joint mortgage with your mum, and use your income to support that joint mortgage - but then you'd likely have an issue with the term of the mortgage. Most lenders will only lend up to a maximum of age 70 or 75, which (depending on her age) might give you a very short term - and consequently very expensive monthly repayments.

What would your long term plan be? I assume you live with your mum now, but if you later meet a partner / have children and want to move out, you might find that being named on your mum's mortgage restricts your ability to buy a house yourself.

askeilo

My long term plan was If I could keep my mothers house, and when she passed away, 20 years? it would have a small mortgage left to pay on it, and would eventually become my property.

I currently live in a house with my wife, which is in my wives name, I am not currently tied to the house i live in. When we bought the house my wife and I currently live in, the plan was for me to be able to buy one my own properties in the future, in an investment sense.

askeilo

Annisele wrote: »

You won't be able to get a mortgage in your sole name to buy a house that a) used to belong to your mother and b) she still lives in. The reasons are complicated, but they're to do with it being difficult for a potential lender to repossess the house if you stop paying the mortgage - your mother's right to occupy it might come before the lender's right to repossess.

Possibly you could get a joint mortgage with your mum, and use your income to support that joint mortgage - but then you'd likely have an issue with the term of the mortgage. Most lenders will only lend up to a maximum of age 70 or 75, which (depending on her age) might give you a very short term - and consequently very expensive monthly repayments.

My mother is 63, and we couldn't afford very high monthly repayments is the mortgage was only a 7year mortgage

edinburgher

How attached to the house are you? Because it sounds like your mother owes more than it's worth, so surely buying it isn't a good idea from an investment point of view? You buying it would lead to a £10k loss for your mother.

Her pension income is very healthy, has she considered renting or buying somewhere smaller?