Mothe-in-Laws income for mortgage

lisajreed

Hello, I'd like some advice please. My mother-in-law was widowed last year and cannot bear to live alone in the house she owns mortgage-free.

She has sold her house and will gift the majority of the money equally to her three children. She is going to move in with my sister-in-law, who wants to buy a new house for them all to live in. Her and her husbands income is not enough on paper for them to secure a mortgage (even though it is only for the same amount she owes on her existing property) so their mortgage advisor is suggesting that my mother-in-law is also put on the mortgage so that her pension income will be taken into account and enable them to get the mortgage.

We have told my sister-in-law that we are uncomfortable with this as should anything happen to affect their income my mother-in-law would have to make the mortgage payments. Their mortgage advisor is telling them that this move is actually to my mother-in-laws advantage but I fail to see how getting her in debt is advantageous to her! Am I missing something?

amnblog

If they lose their income your MIL's 'home' is in trouble in any case.

kingstreet

So, she gives away the proceeds of her sale, then gets involved in someone else's mortgage?

Not clever.

TrickyDicky101

There are potential income tax implications on your sister-in-law in this too if the money from your mother-in-law is financing the deposit on the property. What was the total value of the mother-in-law's and father-in-law's estate?

Foxy-Stoat_3

Advise your Mother In Law NOT to give away her cash !

amnblog

Tooooo late

Foxy-Stoat_3

amnblog wrote: »

Tooooo late

Opening post says that she WILL gift the money to children....tell her not to!!!!!!

Mojisola

Foxy-Stoat wrote: »

Advise your Mother In Law NOT to give away her cash!

Read up on 'deprivation of assets/capital'.

Your MIL should have independent legal advice before she does such a silly thing as give away all her money.

What if your sister-in-law dies and her OH remarries? Would your MIL still be welcome in the house? Would she want to carry on living there?

What if your SIL or OH gets a brilliant new job in another part of the country? Would your MIL be happy to move somewhere new with them?

What if your SIL or OH develops a longterm health problem? Will the fit spouse still be able to work to pay all the bills, care for a sick spouse and an elderly parent?

You can't ever protect again all future changes but it's worth thinking about a few scenarios other than how things are at present. If your MIL keeps her money, she will have options for the future, whatever that is.

Foxy-Stoat_3

Get her to make a Will and keep the money, that way the children will end up with something in the future.

lisajreed

Thanks for the responses.


The money hasn't been distributed yet but my MIL is determined that she wants to do it. Both her sons tried to persuade her to stay in the house but she is adamant that she wants to do this. My husband's brother and sister have now both already had some money, effectively borrowing from the proceeds before the sale is complete.


She has spoken to the solicitor who is handling the conveyance (before the mortgage issue arose) and he advised that he would draw up a legal document for them to sign that gives her some rights in the event of something going wrong (I don't know the details of the document)


I have just briefly read some info on deprivation of assets and it shouldn't apply, she is in good health and currently on a month long holiday in Australia so there is no question that she is disposing of assets in order to avoid paying care costs.


The joint assets were around £270,000 at maximum.


I understand the concern about future security but we are a close family, all living in the same small town and were something to happen to jeopardise MIL's home with her daughter she would come to us or go to her other son - we'd probably fight over her :-) What concerns me more is that she could come out of it with a debt.


I know none of this is ideal and we would have preferred her to stay in the family home and keep it as an asset. My concern now is that she is being hurried into signing up for the mortgage because they are want to progress the sales and purchase and I would like her to take legal advice before doing so.


My sister-in-law has been persuaded by the mortgage advisor that this is to my mother-in-laws advantage. I'm arguing that it can't possibly be advantageous to her to get into debt but don't want to get the blame if the purchase falls through because I'm holding things up. Putting the issue of the gifted money aside am I right to be concerned?

Foxy-Stoat_3

Sounds like the decisions have been made, but can't she be named on the mortgage and inject the £90,000 cash that the son/daughter would of got anyway and and a deed of trust be drawn up to protect her interest.

£90,000 is hers should the property be sold, she can live there rent free etc etc.

Looks like all the vultures have circled and the Mother in Law will be left with nothing.