Removal of somebody from a mortgage!

equalleeds

Just after a bit of advice:

I own a property with my grandmother, I would like to remove her from my mortgage as I am concerned about her mental health and also her financial situation, I will try to give a detailed description of how we both came to this situation we are in, Please read it all as it is complicated and sensitive.

In 2009 my grandmother confided in my that she had ran up credit card debt to the tune of £50,000 at this point she still had £28,000 outstanding on a mortgage, At 69 she was not in work and only had an income of her state pension and a small private pension, Combined it amounted to £700 a month. Due to this she was obviously on the verge of defaulting on her mortgage and she was becoming very depressed. My grandmother had equity in her house but because of her age re-mortgaging was not an option, I was 24 at the time and decided that I would get a mortgage for £78,000, £28,000 was to pay back her outstanding mortgage and £50,000 to pay off my grandmothers credit card debt, I did this and we placed her property on the market to sell, We were both named on the mortgage as my grandmother still had a large amount of equity in her property.
The house went on the market for £210,000 and if it had sold at that once the new mortgage was paid off she would be left with £132,000 (enough to buy a modest house outright) and she would be debt free. Unfortunately the house was on the market for 2 years with me paying the mortgage, eventually she sold for £163,000 quite a bit under the valuation. Once the mortgage was paid back she had £85,000 left (But at least she was debt free?) When it came to buying a new house partly due to where we live there was nothing available in her price range, at this point my gran was 72 and we wanted her to be close to the family, It was then decided that I would stay with her in a joint mortgage to help her fund the purchase of a house, We found a house for £82,000 which my grandmother put down a £41,000 deposit and I matched her contribution but I added an extra £10,000 to pay for the renovations as the house was in a very bad state of repair. My grandmother instructed a solicitor to draw up a deed of trust to protect her £41,000 and we were both named on a mortgage for the total of £51,000. My gran should of then had a healthy bank balance of £44,000 (The money left from the sale of her house)

After 5 years of me paying the mortgage of a house/s we both own that she lives in (I never have) I have paid some £20,000 in mortgage interest payments, My grandmother however now insists she is pennyless and has no money left, She literally has no food in the house, and barely goes out, She has made reference to drawing down on the mortgage to release money from the £41,000 stake she put down in the second house but that would mean me remortgaging and me having to find more money to pay each month, It's just not an option as I now have another mortgage with my partner, I myself am now starting to get into financial difficulty trying to pay 2 mortgages.

I am really concerned now that my grandmother has run a lot more debt up and that I will be some how liable for it, I want to remove her from the mortgage to secure my own finances, I know she will get upset and refuse this but it is either going to be that or the house will have to be sold, Am i right in thinking her £41,000 stake is protected by her deed of trust that we both signed?

Am I a bad person for thinking like this? Any suggestions positive or negative are welcome! I can't discuss this with my family as it leads to arguments

HappyMJ

Her stake is protected.

Your only option as far as I can see is to sell and get out of this deal. Your gran will be rehomed (eventually) in a housing association property or a private rental which the council can help to set up which she'll have to pay for.

And...rule number one never lend money to friends and family. Treat any money lent as a gift and you won't have problems.

Dave_Ham

I fear this is way too complicated for a public forum.


Much will depend upon how the deed of trust was worded and the detail therein.


The situation appears strange though as unsure if you are paying equal split on mortgage as it appears you may be and therefore unsure why you would want to do this at inception?


You need to firstly speak with your Gran, then a Solicitor and then probably an Estate Agent. If you do broker a deal to move forward, you will require a decent mortgage broker as this is an incredibly complicated deal and many lenders will not like the setup.


Clearly your Gran must have an issue financially, you may want to try and bottom this out too before you move forward.

equalleeds

I pay the mortgage payment every month in full as I have done for 5 plus years, My grandmother pays nothing towards the mortgage or the upkeep of the house, In fact she calls me when something brakes / needs repairing as if I am a landlord, Is it easier to remove somebody from a mortgage or just re-mortgage in my own name?

Cheers

TrickyDicky101

equalleeds wrote: »

I pay the mortgage payment every month in full as I have done for 5 plus years, My grandmother pays nothing towards the mortgage or the upkeep of the house, In fact she calls me when something brakes / needs repairing as if I am a landlord, Is it easier to remove somebody from a mortgage or just re-mortgage in my own name?

Cheers

Without her agreement, you won't be removing her from the mortgage! Does she agree to your proposed actions?

equalleeds

TrickyDicky101 wrote: »

Without her agreement, you won't be removing her from the mortgage! Does she agree to your proposed actions?

Of course I need her agreement, I am fully aware of that, If she does not agree I will have to look at selling, I just did not want to cause her any upset but I guess its too late for all that, I should of never tried to help

Annisele

I agree with Dave Ham; this is going to be very complicated.

I am puzzled as to why you want to remove your grandmother from the mortgage. Surely (for you) it would be better to remove you instead? I appreciate that won't be easy, and will likely require another family member to replace you - but I don't think you have any easy options left.

If you can't afford to borrow another £41k, then your grandmother's plan is dead in the water anyway - if you can't afford to borrow it, then nobody is going to lend it to you. If she really wants to release the £41k, then I think she's probably going to have to sell. That may be best all round.

I also think you should be trying to bottom out what is happening to your grandmother's finances. Is she gambling? Being scammed out of her money? Or just plain living beyond her means? If she doesn't sort that out, she's going to be knocking on the BankOfEqualleeds' door in another few years.