inheritance

haras_nosirrah

I am assuming it is an off set mortgage.

Client gets a mortgage of 100k, pays the money straight into the linked savings account so that should they need it they can have the money back

Problem is the dwp see the money as savings as they can access it however the client thinks this money should be solely used to repay the debt as if they hadn't taken the mortgage then they would qualify for full benefits

Question is why did you take an offset mortgage if the money was only ever going to sit there - you may as well have not taken a mortgage at all

jlawrence

Housing_Benefit_Officer wrote: »

Confused here. I have never heard of a property deal where you give the Estate Agent £100,000 that they then keep and will hand back to you in 2020 and you also take out £100,000 mortgage that you don't pay any interest as the £100,000 you have given to the Estate Agents offsets this???

Whose names are on the deeds and what is the debt owing on the property and who is it owed to. How much did the property cost to purchase. Did your solicitor give any advice to this very peculiar and odd financial arrangement.

Hi, you have it all wrong if you had taken the time to read what I have said. We bought a 2 bed bungalow as the old 4 bed home was far too big and neither of us can use the stairs due to disabilities. We purchased the property using approx. £275,000 of our own money + a mortgage for the remaining £100,000. Due to have a low income the bank (Woolwich) insisted that they would only give us the mortgage on two conditions. The first that they have a first charge over the property and secondly that we deposit £100,000 in an offset bank account with Barclays. As the deposit is equal to the mortgage (interest only until 2020), no interest is charged by them on the £100,000 and we don't get any interest on the £100,000 invested. So we don't pay any mortgage interest so long as the deposit and the mortgage match. The interest only debt is to be repaid in 2020 using the £100,000 they hold.
This was suggested to us as a way round not having a satisfactory income level by the estate agent that was acting for the people that we bought the bungalow off.

jlawrence

haras_nosirrah wrote: »

I am assuming it is an off set mortgage.

Client gets a mortgage of 100k, pays the money straight into the linked savings account so that should they need it they can have the money back

Problem is the dwp see the money as savings as they can access it however the client thinks this money should be solely used to repay the debt as if they hadn't taken the mortgage then they would qualify for full benefits

Question is why did you take an offset mortgage if the money was only ever going to sit there - you may as well have not taken a mortgage at all

Hi, as this was almost all of our capital and having a very low income, it was, as you have said, sold to us that if times got really hard we could access some of it. If we had purchased the property outright using all of our money, we would have been in a right predicament if we needed a few hundred or so for an unseen expense. Our income was just about enough to live on (which is not now the case as neither of us can work any longer) + subsidised by the balance of our savings that over the past couple of years has now gone, mainly on paying for the carers that we have coming in every day.
We now have a much reduced level of income coming in and no benefits. We only have the £100,000 invested in the bank. If we are to use that, how are we supposed to pay the mortgage off in 2020? Besides which I doubt very much that the bank will be too happy if we deplete that capital anyhow.