Want to change Deeds

croyland87

Hi there everybody I I have a question I need to ask which I am not sure of. I bought a house with my father in 2006 on a interest only mortgage now my dad is 65 and I am 28 years the department of work and pension pay around about £220 a month towards the mortgage for my dad and also we only pay half of the council tax.

Now I want to remortgage the house and want to take my dad off the deeds and mortgage and leave the house just in my name which he is quite happy to do because when we bought the house we never gave a deposit it was %100 and plus he has never gave anything on the house apart from the DWP payments. How do I do all of this the mortgage payments will stop what about council tax benefit as he will still be living with me. Thank You

Beckyy

If it's a 100% interest only mortgage then you will need a deposit to remortgage with a repayment mortgage.

If you want to keep your current mortgage you can approach your lender and a solicitor to ask for your father to be removed from the mortgage and deeds providing the lender is happy, however you will still have a 100% interest only mortgage.

Council tax is based on who is living there so I would assume it would stay as it is however I can't confirm that. Call your local council office and they should be able to tell you exactly.

croyland87

Thank you very much for your reply I want to go to another lender as the existing lender will not help me NRAM. And I have a small deposit.

So How do I do it will my dad have to sell me his half or do I just transfer it into my name will DWP have a problem with it paying him his benefits.

Beckyy

What % deposit do you have?

The best way would be to contact DWP and clarify with them.

You need to get in touch with a solicitor once you have found a mortgage product. You may need an Independent Financial Advisor to find a mortgage if you're not confident doing it yourself.

croyland87

I have £5000 deposit I am just thinking what do I say to DWP they should really be happy about it because they are going to save money.

Heffi1

I am in this position and enquired with the Halifax about taking over the mortgage on my mums house, where I live, and I was told if I buy the house from my mum, she would no longer be allowed to live in the house, so be careful and check the paperwork really well.

Gloomendoom

Heffi1 wrote: »

I am in this position and enquired with the Halifax about taking over the mortgage on my mums house, where I live, and I was told if I buy the house from my mum, she would no longer be allowed to live in the house, so be careful and check the paperwork really well.

Who is saying that your mum can no longer live in the house? The Halifax?

The Mortages board might be a better place for this thread.

http://forums.moneysavingexpert.com/forumdisplay.php?f=15

Heffi1

Yes the Halifax, we went in to talk tothem and they said they have their own rules and one of them was to make her move out if I was to purchase it in my name, but the whole point was to continue as we were, so I am going to wait until my credit file is completely clear and go with someone else, as I pay the mortgage at the moment, it is just in her name.

Bit of a disappointing thing, but it seems the only way I can work around my messed up credit file, hopefully it will have recovered by the end of this year.

BigAunty

croyland87 wrote: »

will DWP have a problem with it paying him his benefits.

Might be better if your run past your proposals on the Benefits forum.

I'm assuming that you are giving him his true share of the equity based on the actual current value of the property when the sale/transfer takes place? What is the equity and what is his share?

This will avoid any potential deprivation of capital/assets issues if he was to merely 'gift' you the property - claimants who are believed to have given away their means in order to continue to claim can be treated as if they still have them by the benefit authorities (known as 'notional capital').

Pensioners going into Care homes or applying for social care services at home can face an investigation into what happened to their former home purchases, for example (see the Age UK website to understand how a local council can review historic financial transactions such as the transfer of home ownership to children when they assess an applicant requesting care).

Some benefits like council tax discount and pension credit (which I assume he's getting to qualify for the Support for Mortgage interest) take into account capital (such as savings) and may reduce or rule them out. For example, sums over 6k start to reduce council tax benefit while sums over 16k rule them out (might be the same with Pension Credit, you'd need to check).

You can model the impact of his coming into any money from the sale of the property by entering your proposed scenario into the Turn2us online benefit calculator.

Kynthia

A lot of mortgage lenders won't lend to someone buying a property when the former owner will continue to live there. I think it's because it can cause problems should they ever need to reposses. Try the mortgages part of the forum for advice.

Yorkie1

I don't think this idea is a starter, for many reasons.

In order to take one person off a mortgage, the lender will want to be satisfied that the person taking on the mortgage on their own can afford it.

From later this month new affordability rules come into force (though some lenders are already applying them) which means that a potential borrower will be scrutinised to see whether they can afford the mortgage at 6% interest or even 7% interest, not just at the rates available now.

I believe that NRAM are no longer offering new mortgages hence they won't help you.

As others have said, there may be an insurmountable problem - even if you pass the affordability test with a new lender - if your father continues to live in the property. This is for the reasons previously stated.

If he is claiming means-tested benefits then you would have to pay him the full amount for his half, or there are deprivation of assets issues. In other words, he will be treated as though he has the money in the means-test. And he won't be able to claim housing benefit for rent in a house which he previously owned, if that was part of the possible plan.

What was your exit plan when you took out the interest only mortgage originally?

If you want to explore this further then you really should go over to the mortgages forum where the brokers hang out.