Question - Being told relative has to be removed from mortgage

thecornflake

Hi,

I'm asking this on behalf of a family friend, and I don;t have a lot of details of the actual mortgage agreement yet but wanted to get general opinion on this and see if anyone else has come across anything similar.

This lady lives with her elderly father, who is of sound mind etc but not terribly well physically.
They have a joint mortgage and are both on the deeds, she pays the mortgage. I think there is quite a lot of equity, they've had the mortgage for a while now. She's around 45 years old and her father is I think about 75-80. She has an official letter lodged with a solicitor stating when he passes away the house is hers, although I'm sure it would be in the will anyway.
She's been told by her mortgage company she has to remove him from the mortgage and get a new one. The current mortgage is at 2.5% for life. The mortgage company have promised they'll get her a 'better deal'. I've looked at the current rates and I'm not convinced, it might be a better short term rate but if the rates go up when it runs out she could end up having to go to a rate higher than 2.5%. I don't know how long is left on the mortgage (will try to find out later) but I think it's still got a few years left.

I did some searching about this because it sounded a bit odd to me, and the only thing I found was a lady asking if she could take a relative off the mortgage (very similar circumstances - unwell parent living with them, joint mortgage, parent not paying the mortgage) and she was told in the replies it could be seen as trying to avoid the rules around care costs (free if the parent didn't have assets over about 30k, I know this is changing in 2016 to about 120k). As it was possible the parent could end up in a care home at some point this was why. There was also a phrase used of 'deprivation of assets' - basically might seem like they were trying to take the asset of the share of the house from the parent.

I'll try to get more info on the mortgage agreement but if anyone has any thoughts on this I'd be interested to hear them. Have obviously advised the best course of action is to ask an IFA or solicitor who specialises in mortgages, probate etc.

betmunch

If you are happy with the 2.5% rate why are you looking at changing the mortgage?

They can't force you to make a change to it.

mrginge

What you're saying doesn't make sense.

The lender cannot force them to get a new mortgage unless for example the current one was IO that had reached the end of term.

Equally the lender is not going to give a new mortgage to the daughter while the father remains on the deeds.

There is more to this than you are either saying or are aware of.

Goldiegirl

As long as the terms and conditions of the mortgage are being adhered to, and the monthly payments are being maintained, the lender wouldn't suddenly tell the borrowers that one of them had to be removed from the mortgage.

I think you've probably only had half the story

thecornflake

Sorry if it came across as sounding dodgy lol. It's my wife's aunt. I don't have a lot of details yet, she said about it at the weekend but basically they called her and said her father had to be removed from it and therefore the mortgage had to be re-done. That and the fact it's 2.5% lifetime rate is all I know, hoping to speak to her later and get more facts which I'll post when I get them. She's worried she won't be able to afford to carry on living in the house and it's been adapted with a stairlift etc for her dad.

I'm looking into it because I really don't think it sounds right at all. Initially I thought it might be because of his age or health issues but from other information I've seen searching around this shouldn't be an issue.

betmunch

The only reason they should call her is if the term is coming to an end.

If its not coming to an end then just keep paying and don't worry.

Might be an idea to get her to join the forum and join the discussion

thecornflake

Update -

Mortgage has 17 years left. They did the classic 'invite in for an account review' and have advised her to remove her dad from the deeds altogether and remortgage for just her because "we can do you a better deal". But basically given the impression she has to do this. Her account is never overdrawn and never misses any dd payments etc.

She's speaking to her solicitor tomorrow and looking for a good local IFA....

nidO

thecornflake wrote: »

She's speaking to her solicitor tomorrow and looking for a good local IFA....

What for? If she's happy with the mortgage she currently has, her answer to her bank/mortgage provider can extend as far as "no."

mgdavid

is there any risk in simply ignoring them?

betmunch

thecornflake wrote: »

Update -

Mortgage has 17 years left. They did the classic 'invite in for an account review' and have advised her to remove her dad from the deeds altogether and remortgage for just her because "we can do you a better deal". But basically given the impression she has to do this. Her account is never overdrawn and never misses any dd payments etc.

She's speaking to her solicitor tomorrow and looking for a good local IFA....

Write a complaint about how it was handled.

Then continue paying and ignoring them. Just stick to the contract that she has, don't try and change it

Mojisola

thecornflake wrote: »

They have a joint mortgage and are both on the deeds, she pays the mortgage. I think there is quite a lot of equity, they've had the mortgage for a while now. She's around 45 years old and her father is I think about 75-80.

She has an official letter lodged with a solicitor stating when he passes away the house is hers, although I'm sure it would be in the will anyway.

If they are 'joint tenants', the house will belong to the survivor when the first one dies. This makes things much more certain than if they are 'tenants in common'.

I don't think a letter will over-ride the inheritance laws.