Paying parent's mortgage but not named on it

WastedJoker

Hi,

Since my Mum died in 2007 I've been paying the mortgage on the family home (I moved back home prior to 2007 in order to help my father care for her during terminal illness). After her death I discovered they hadn't taken out a life insurance part of the mortgage which meant my father was left to pay it (I believe this was before life insurance was a mandatory component of a mortgage?). I ended up staying with him to pay the mortgage. His health has deteriorated significantly.

We've looked into getting my name on the mortgage but I seriously doubt I'd pass any credit checks and, if memory serves, there was something like a £500 charge to do so.

Hios health has taken a nosedive in the last year or so which has led to my concerns over the future of the house.

In the event of my fathers death, what happens to the mortgage/house?

The mortgage is for 15yrs and is up in just under 3yrs time. All payments since 2007 have come from my current account.

rtho782

Life insurance still isn't compulsory, we don't have it.

In the event of his death the house forms part of his estate, he can leave it to you, or whoever else he wants to. If his estate cannot clear the mortgage before doing so the house may well need to be sold, or the person receiving the house may well have to take out their own mortgage on it.

It will be liable for inheritance tax if over the threshold.

The fact that you have been paying the mortgage isn't really relevant to this.

WastedJoker

Thanks for the quick reply.

I'm named in the will as the one who gets the house. My brother and sister have been informed of this by my father (there's bad blood between him and them).

I doubt the estate will be sufficient to pay off the mortgage and I'm not in a great credit position (I am servicing all my debts but clearly at the limit of my credit). As the person named in the will for the house does that extend to the proceeds of any sale or will that need to be specified in the wording of the will?

My father was quite adamant they wouldn't see a penny of it and, as harsh as this seems, I've been paying the mortgage for nearly half the term as well as being his main carer with zero support from them, so I'm reluctant to split proceeds evenly. My own housing future has been placed on hold after all whilst they have been free to get on with theirs.

Mojisola

WastedJoker wrote: »

Since my Mum died in 2007 I've been paying the mortgage on the family home

His health has taken a nosedive in the last year or so which has led to my concerns over the future of the house.

The mortgage is for 15yrs and is up in just under 3yrs time. All payments since 2007 have come from my current account.

You could draw up a loan agreement showing that all the mortgage payments you have made were a loan (and the same for the next three years). That way your money is protected.

Once the mortgage has been paid off, you could become a joint owner of the house by changing the deeds and cancel the loan.

If you become 'joint tenants' with your father, you both own all the house and it won't form part of his estate when he dies.

If you become 'tenants in common', then you will own a specified percentage of the house and he can leave his share in his will to whoever he wants - but that would raise the possibility of your siblings attempting to challenge the will if they were left with nothing.

Thrugelmir

WastedJoker wrote: »

I'm named in the will as the one who gets the house. My brother and sister have been informed of this by my father (there's bad blood between him and them).

A will can be contested. Worth taking advice to protect the amount you've contributed to the mortgage.

With 3 years left to run the existing mortgage must be a relatively small amount. Shouldn't be out of the realms of possibility to source funding from somewhere. Albeit not at the cheapest rate of interest.

At the worst. Sell the property and use the equity to settle your debts. Will at least give you a new fresh start.

Mojisola

WastedJoker wrote: »

His health has taken a nosedive in the last year or so which has led to my concerns over the future of the house.

Is he claiming all the benefits that he is entitled to?

WastedJoker

Mojisola wrote: »

You could draw up a loan agreement showing that all the mortgage payments you have made were a loan (and the same for the next three years). That way your money is protected.

Once the mortgage has been paid off, you could become a joint owner of the house by changing the deeds and cancel the loan.

If you become 'joint tenants' with your father, you both own all the house and it won't form part of his estate when he dies.

If you become 'tenants in common', then you will own a specified percentage of the house and he can leave his share in his will to whoever he wants - but that would raise the possibility of your siblings attempting to challenge the will if they were left with nothing.

Joint tenants/common tenants: how is this done? Is changing the deeds after mortgage payoff done via land registry?

I can see there are loan agreement forms online to use so I'll look into that. Not sure how they'll accommodate historical sums though.

Thrugelmir wrote: »

A will can be contested. Worth taking advice to protect the amount you've contributed to the mortgage.

With 3 years left to run the existing mortgage must be a relatively small amount. Shouldn't be out of the realms of possibility to source funding from somewhere. Albeit not at the cheapest rate of interest.

At the worst. Sell the property and use the equity to settle your debts. Will at least give you a new fresh start.

If the mortgage is paid off before my father passes away how would that affect any will/contested will?

There is a touch under 10k left on the mortgage. That is likely beyond my credit limits at the moment but I'll speak to my bank.

WastedJoker

Mojisola wrote: »

Is he claiming all the benefits that he is entitled to?

Yes - we recently had to go through a tribunal process over his incapacity benefit/disability living allowance (I think they have new names now!) so we're on track with that. My earnings rules him out of some benefits though (such as reduced council tax/mortgage payment support).

Mojisola

WastedJoker wrote: »

I'm named in the will as the one who gets the house. My brother and sister have been informed of this by my father (there's bad blood between him and them).

My father was quite adamant they wouldn't see a penny of it and, as harsh as this seems, I've been paying the mortgage for nearly half the term as well as being his main carer with zero support from them,

Was his will written by a solicitor? Did the solicitor suggest that your father wrote a letter to be kept with the will explaining why he isn't leaving anything to two of his children?

It could also be worth your father writing you a letter (that you keep safely) thanking you for coming to live with him, paying the mortgage so that he could stay in the house and being his carer.

The more evidence you have in his words, the lower the chance your siblings would have to successfully challenge the will.

If it's just your word against theirs, they could spin a story that you moved in and dominated your father, made him cut off contact with them and made him leave his estate to you.

WastedJoker

I've asked my father to speak to the mortgage company tomorrow to get a fresh take on what is needed to get me on the mortgage. I was sure a credit check was required but my Dad's recollection is that no credit check was required and all we needed to do was have a signed letter from a solicitor (?!?) to forward to the mortgage company and the cost was a few hundred pounds?

Mojisola

WastedJoker wrote: »

Joint tenants/common tenants: how is this done? Is changing the deeds after mortgage payoff done via land registry?

Yes. https://www.gov.uk/registering-land-or-property-with-land-registry/transfer-ownership-of-your-property

I can see there are loan agreement forms online to use so I'll look into that. Not sure how they'll accommodate historical sums though.

You could do this more informally by a letter where your father accepts that he owes you the sum that you've paid out up to now.

If the mortgage is paid off before my father passes away how would that affect any will/contested will?

If the mortgage is paid off and you become 'joint tenants' then the house will not form part of your father's estate so your siblings won't have any rights to it at all.