Mortgages for old & disabled people

Shauna87

Hi,

I was just seeking some advice. My mother is in her 50's, is a long term (20+) council tenant on long term disability benefits. She's been in the house she raised us kids in for 23 years.

My mom was an alcoholic for 10+ years and it really ruined her life, but she's been sober for 3 years now, and is turning her attention to long term security. She has a clean credit record (she has never believed in misusing credit) ans she is good with managing her benefits.

She'd like to take advantage of the government's Right to Buy policy... But we are both unsure how to approach this. We do know that with her tenancy record she would probably get the full discount of £108, 900.

I can't quite get an accurate valuation on the property from a similar properties in the area, they all range from £120, 000 - £200, 000.

I know next to nothing about mortgages. Are there any mortgage lenders that might lend to my mom? Given her age and disability status? How do mortgages work? Can somebody tell me what the ratio of capital to interest might be, or is it completely variable? If her council or the DWP were to pay the "interest" does that amount to a large portion of the monthly payments, or a small portion?

Sorry, I don't even understand the basics.

What I do know is that although she might not be able to repay the mortgage in her lifetime, this is with a view of the property being left to me in future to take over the mortgage.. Is this usual practice?

What I do know is that if the payments were like rent, at around £400-500 a month, we could pull together and easily afford this... and if the DWP's support for paying the interest is substantial, then payments will be a walk in the park.

I'm just not sure about the order of the processes or how to explain this to my mom, who is relying on me to straighten out the details. We would love to keep the house within the family, and she would also like to do something to help with mine & her granddaughter's future, in regards to getting us on the property ladder (so hard for us millennials!)

Any and all advice/information would be appreciated,

Thank you.

davidmcn

Her long term security would best be served by remaining a council tenant.

Shauna87

I should clarify.

Long term security in regards to retaining wealth in the family.

She was advised to buy the place by by aunts and uncles 20 years ago who all did the same. They've all made tens of thousands of pounds since then as property prices increased 3 or 4 fold.

[Deleted User]

I would suggest that when one of your questions is "How do mortgages work?" then you are a long way away from sensibly approaching this situation.

Start by a little education on the process and implications - many many library books and sections of the main site will help you on this

Shauna87

I thought I was starting that process here.

Honestly don't know why I bother ever asking questions here, as it's rarely the questions asked are ever addressed. You just get answers to questions you've not asked.

Silvertabby

Shauna - just because you are getting the answers you don't want to hear doesn't mean that they are the wrong answers.

Am I right in thinking your mum gets housing benefit? If so, that would stop as soon as she 'bought' the house. That would leave her in a position of having to pay her mortgage from her disability income alone. I'm sorry, but that's not going to happen.

As for keeping 'wealth in the family', have you considered even if your mum had been able to buy the house, it would then have to be sold to pay her nursing home fees should she need that sort of care in later life?

What I do know is that if the payments were like rent, at around £400-500 a month, we could pull together and easily afford this... and if the DWP's support for paying the interest is substantial, then payments will be a walk in the park.

DWP support for mortgage payments is now a loan, to be re-paid on the sale of the house.

Only your mum can buy the house and I very much doubt that you and your siblings would be able to get a mortgage for a property that you don't own. That would leave you in the position of paying the money directly to your mum - which could then be taken into account when assessing her entitlement to benefits.

downhillfast

Shauna87 wrote: »

I thought I was starting that process here.

Honestly don't know why I bother ever asking questions here, as it's rarely the questions asked are ever addressed. You just get answers to questions you've not asked.

Asking a question about RTB here never goes down particularly well. Unfortunately these questions get asked a lot by family members of the actual person entitled to buy the property at a discount as they see it as an easy route to eventually gain the property themselves.

As has been pointed out the absolute best position for your mum to be in from a future security point of view is as a council tenant as she is protected from any costs associated with maintaining the property and cannot be evicted should her income change.

If she does decide to buy the property so that she can then leave it to you, you have to bare in mind that should she need to go into care the house would be sold to fund her care home fees anyway.

MovingForwards

......and if the DWP's support for paying the interest is substantial, then payments will be a walk in the park.

Nope, that went a while ago, it's now a loan.

What benefits is she actually on and how much does she receive?

anmarj

It will be for interest only that the DWP will help with, so she would have to find money for the capital part or even if she secured a interest only deal, she will have to find capital at the end, she also may have to wait 39 weeks before getting help and on means tested benefits

https://www.gov.uk/support-for-mortgage-interest

Shauna87

I couldn't tell you exactly, as I haven't pried into much detail. She's a private person.

But I do believe it's Income Support & PIP. Maybe something else, as she's not short of money at the moment (unlike other's who I know struggle) and she has managed to save a few thousand in a relatively short space of time. (last two years).

I know we'll need a detailed break down for the future applications for affordability purposes.
But she's excpecting to have to pay about £4-500 a month, which didn't seem to phase her. I told her that me & my partner could support her a couple of hundred a month if she were to receive no help from the benefits office with these payments.

I just read that the interest had switched to a loan.. It says this on CAB:

You’ll need to pay back the loan, but usually only when you sell your home or give it to someone else. For example, you might give the home to your son or daughter, even if you still live there.

So, could this still be an option?

Shauna87

I'm just taking a quick crash course in mortgages now, thanks to some knowledgeable people on YouTube. Would banks view the Right to Buy Discount as a positive? I read that the discount could be used to also put down the deposit.. and the value of the house will always be more than the Loan to Value... Are all these positives and does this mean that getting a mortgage could be likely?

Or am I hopelessly confused?

Me & my partner are financially responsible, I'd have no issue taking on my moms SMI debts (when the time comes) along with the rest of her estate.