Elderly mother's IO mortgage ending, can't pay!

AngelOfTheNorth

bsmm228 wrote: »

Let Us See - thank you so much for the advice does make things clearer.

I think we are now deciding that we will both raise the funds to pay it off, I just wasn't sure if we would be allowed to.

Can't see where the problem would be? If your mother owes 26k and someone gives her 26k, why wouldn't she be able to use that money to pay off her mortgage if she wants? Or were you thinking the problem might be getting the 26k rather than giving it to her once it's been obtained?

Let_Us_See

silvercar wrote: »

Very interesting and helpful.

What would happen if option [1] was taken and the interest only payments proved unaffordable at some point in the future?

With option [2] what happens if a new partner moves in who outlives the mother. After 15 years is the whole thing re-evaluated? Are there any property valuations along the way and if so, what effect would a drop in value have?

Options 1 is based on affordability, and in retirement only long term, guaranteed income is acceptable, and in my experience affordability is set higher than for residential lending. If an applicant is accepted, and find they cannot maintain the payment, they will simply be switched to a standard lifetime mortgage scheme with rolled up, compounded interest.

If a new partner moves in, the situation is the same as for any non-mortgage and non-title holder, they have no automatic right of abode. Naturally, this can be addressed if second person is aged qualified, with an acceptance to be added to mortgage and title deeds.

If the person is still alive after fifteen years, and many are, the mortgage simply continues, and the only valuation is at the original mortgage application. Most lifetime lenders offer a negative equity guarantee, where on death, if the balance of the original loan and subsequent compounded interest, is greater than the value of the property, they will absorb the loss.

I hope this helps.

silvercar

Let_Us_See wrote: »

Options 1 is based on affordability, and in retirement only long term, guaranteed income is acceptable, and in my experience affordability is set higher than for residential lending. If an applicant is accepted, and find they cannot maintain the payment, they will simply be switched to a standard lifetime mortgage scheme with rolled up, compounded interest.

If a new partner moves in, the situation is the same as for any non-mortgage and non-title holder, they have no automatic right of abode. Naturally, this can be addressed if second person is aged qualified, with an acceptance to be added to mortgage and title deeds.

If the person is still alive after fifteen years, and many are, the mortgage simply continues, and the only valuation is at the original mortgage application. Most lifetime lenders offer a negative equity guarantee, where on death, if the balance of the original loan and subsequent compounded interest, is greater than the value of the property, they will absorb the loss.

I hope this helps.

Very helpful thank you. Good to know the options.

Let_Us_See

bsmm228 wrote: »

I think we are now deciding that we will both raise the funds to pay it off, I just wasn't sure if we would be allowed to.

I am pleased my comments helped clarify your options and raising the funds personally may well be the best option. However, before doing so, consider your mother's health and check if any loan you consider arranging has a penalty for early redemption.