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Loan to Repay Mortgage - Advice Required
Comments
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Why don't you just take out the loans, give your mum the money to pay off the mortgage, and let her keep her house herself? That seems simplest.
You could request that she leaves the property in an equal split to the three of you in her will, but why do you want ownership of it now? I'm assuming you have no plans to do anything with it other than let her live there rent free?0 -
getmore4less wrote: »Purchase full market value(no deprivation or IHT issues) give a life interest(no rent, no CGT issues) pay off the loan and give the rest of the cash to the parents.
then it is just a raising funds issue.
I'm not quite sure I understand this solution..... If the house is purchased at full market value, mum would receive proceeds of the sale, pay off the outstanding debt and be left with the balance.........0 -
What would happen if the mortgage wasn't paid off and she just continued making the interest payments? Would the bank really force a sale?Hi, I’m after some advice and give some brief history below;
My father passed away a few years ago, which left my mother with an outstanding mortgage of approximately £50K. As her income reduced substantially as a result, this balance was transferred to an interest only product, which allowed my mother to remain in the family home.
The mortgage term is now up and £50K is due for repayment, with no funds in place.
Mother is over 75 years of age, so in order for her to remain in the house, I and my two sisters have agreed to take out personal loans to repay the outstanding balance. In return, my mother would like to gift us the property.
The property value is way under the IHT threshold, so it all sounds straightforward enough but are there any other factors which we need to consider before going ahead?:footie:
Regular savers earn 6% interest (HSBC, First Direct, M&S) Loans cost 2.9% per year (Nationwide) = FREE money. 0 -
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Red-Squirrel wrote: »Why don't you just take out the loans, give your mum the money to pay off the mortgage, and let her keep her house herself? That seems simplest.
You could request that she leaves the property in an equal split to the three of you in her will, but why do you want ownership of it now? I'm assuming you have no plans to do anything with it other than let her live there rent free?
Mum wants to gift the house to us by way of thanking us for raising the funds required to pay off the outstanding balance. We have no plans for the property other than allowing mum to stay in the family home for the rest of her natural life. Mum has no will at present.0 -
Mum wants to gift the house to us by way of thanking us for raising the funds required to pay off the outstanding balance. We have no plans for the property other than allowing mum to stay in the family home for the rest of her natural life. Mum has no will at present.
Willing it to you seems a good way to do that without the potential complications including deprivation of assets etc, and without the risk that she finds herself needing care and having limited choices/control over how and where she receives that care.0 -
Mum wants to gift the house to us by way of thanking us for raising the funds required to pay off the outstanding balance. We have no plans for the property other than allowing mum to stay in the family home for the rest of her natural life. Mum has no will at present.
But why not give the house to you in her will? It's easier and has the same overall effect, without her home being put at risk if one of you gets divorced or goes bankrupt.0 -
This whole 'deprivation of assets' thing keeps cropping up, so I've done some research and it would appear not to apply in this case due to the following wording within the factsheet;
The statutory guidance also confirms that, for example, it would be
unreasonable to decide that a person had disposed of an asset in order to reduce the level of charges for their care and support needs if at the time the disposal took place they were fit and healthy and could not have foreseen the need for care and support.
It's also highly unlikely that mums home would ever be at risk due to divorce or bankruptcy but I've taken the comments onboard.
Mum is quite determined about gifting the property to us all, if we are able to help her out financially......0 -
As long as she's fit and healthy and cannot foresee a need to go into a care home soon then that's not deprivation. If she goes into a care home within the next few years they will look at what you've done to see if she could have foreseen a need to keep it. Does she visit the GP regularly? Would the GP declare her fit and healthy and doesn't see any deterioration in her health in the future?This whole 'deprivation of assets' thing keeps cropping up, so I've done some research and it would appear not to apply in this case due to the following wording within the factsheet;
The statutory guidance also confirms that, for example, it would be
unreasonable to decide that a person had disposed of an asset in order to reduce the level of charges for their care and support needs if at the time the disposal took place they were fit and healthy and could not have foreseen the need for care and support.
It's also highly unlikely that mums home would ever be at risk due to divorce or bankruptcy but I've taken the comments onboard.
Mum is quite determined about gifting the property to us all, if we are able to help her out financially......:footie: Regular savers earn 6% interest (HSBC, First Direct, M&S) Loans cost 2.9% per year (Nationwide) = FREE money. 0 -
As long as she's fit and healthy and cannot foresee a need to go into a care home soon then that's not deprivation. If she goes into a care home within the next few years they will look at what you've done to see if she could have foreseen a need to keep it. Does she visit the GP regularly? Would the GP declare her fit and healthy and doesn't see any deterioration in her health in the future?
Mum is 75 years old and is currently fit and healthy. There will obviously be a deterioration in her health as she gets older, that is inevitable. Will she need care and support in years to come? Who knows?0
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