Deed of Trust/Care Home Fees

alxx_b

Hi guys!

Basic background; My husband and I are moving in with his parents and extending their home so they can stay in their home in their old age and we will take over the house (mortgage etc).

They will have a Deed of Trust for the equity in the house at the moment and the house will be in our names. They will leave their equity to my husband and his sister in their Wills (or to the grandchildren).

If one of them goes into a home, how will it affect our position?

teddysmum

Have you actually checked that what you propose is possible ?


From reading on here, I gather that you cannot take over someone else's mortgage, so the in-laws would have to pay it off by selling to you.


I've also read that lenders are reluctant to give new mortgages, where the original occupants stay in the house.


If wrong, I'm sure that someone will soon correct me.
.

alxx_b

Hence why I'm asking for people's experiences on here.

We are seeing the mortgage company tmw who, on the phone, seemed optimistic for our proposal but as we know, what they say on the phone and what they say in the branch may be different.

Mojisola

alxx_b wrote: »

If one of them goes into a home, how will it affect our position?

If one of a couple goes into a home, the value of the property that their partner is living in is disregarded in the financial assessment.

If the survivor (or both of them) goes into a home, the council may include the value of their share of the property in the assessment and put a charge on the house.

Annisele

This sounds to me like an issue for a broker, rather than for a lender. The lender will only be able to sell its own products, which might not suit an unusual situation like yours.

Some possible issues you might have:

• As teddysmum said, you can't just take over a mortgage. There might be options including a transfer of equity, or all four of your taking out a new mortgage with another provider, etc etc. There are advantages and disadvantages to all of those options.
• How will you be funding the building work, and will the lender allow it? (Lenders are usually fine with extensions - but if your LTV is high, and you'll be ripping the whole of the house apart, they might be less keen).
• What happens in the event of death/divorce/bankruptcy of any of the people involved? It's (presumably) unlikely that your husband will die before his parents, or that his parents will get divorced - but it's easier to think about those things before they happen.
• What if you can't afford to buy your husband's sister out on their parents' death? Would she be able to force the sale of your home?
• What if you, or his parents, want to move in future?

I think that what happens if one of the parents needs care depends, in part, on how you choose to make the arrangements here. And that will depend on what's possible. There's no harm in speaking to the lender, but I think a chat with a whole of market broker is likely to give you a better idea of your options.

teddysmum

The house is only considered when the last of the couple needs residential care.