Helping mum

Keep_pedalling

c0nn0r84 wrote: »

Thanks very much for the replies. Deprivation of assets was one of the other concerns I had and what happens if she needs to go into care because we wouldn't be in a position to pay for it. I'm of the mind personally that it's probably easier and for the best to sell the house and have 150k and then look at renting if buying for her isn't an option, but she is very attached to the house and the area.

My worry is she digs her heels in, does nothing and the house ends up getting forcibly taken from her by the bank. We wouldn't be able to pay it off before the mortgage is due up hence why we are looking at whether we can buy it for her. presumably we could, then if she needs to go into care later on, we could sell it to pay for it?

In short she wants the house more than she wants the money. She has existing income from pensions & other bits and bobs enough for her to cover her day to day life.

Hopefully the fact that having her children take a whole pile of dept on is the only way should could stay put, will sway her to giving up her current home. I know too many people who have hung on to homes far to long. There are a couple of houses in my street where the occupants no longer have the money or energy to keep their homes in good order, so despite sitting on a fortune they are living like paupers.

Does she have any friends who have already gone through this and downsized or moved into sheltered housing? If so they may be good people to talk to her about her options.

Keep_pedalling

davidmcn wrote: »

While technically that's possible, in practice banks don't like risking the sort of publicity which comes from kicking little old ladies out onto the streets, especially if they're actually still able to service the debt.

I would not rely on that, they are many people in her situation who had their homes forcible sold under these circumstances.

saajan_12

I think you need to try a few options, if the previous don't work:

1) Mum extends mortgage as interest only in her own name, so hopefully the term outlasts her lifetime, with the mortgage being repaid through sale after her death. Does she have benefits / regular income to support the interest?

2) You / siblings buy half property (in common or jointly with mum) and raise a mortgage for the 150k, with affordability based on your income. Speak to a broker if they can suggest a joint owner / single borrower mortgage.

3) You / siblings buy whole property for 300k: mum loans you 150k deposit and you borrow 150k on mortgage. Mum's loan can be recorded as a second charge on the title after the mortgage lender. Then you haven't bought undervalue, mum still has the right to her 150k equity, just in the form of a debt. If / when she needs care, the property can be sold, and you repay her 150k from the proceeds, which can go towards her care.

[Deleted User]

AdrianC wrote: »

She currently owns a £300k property, on which she owes £150k. She has £150k in assets.

The £150k borrowing needs paying back.

Seems to me to make perfect sense to jointly own the property with her, buying a 50% share in it by paying off the mortgage.


Her £150k remains in her name, and can be called on by the local authority if she requires care - no deprivation of assets.
You need to find £150k.

"Needing care" is not just about mobility. Who's willing to live there with her and become her 24/7 carer if she develops dementia, for instance?

Yep, we've made it clear based on our own circumstances that if the worst happens (god forbid) we wouldn't be able to provide the level of care she may need which has to come first.

I'm in the merchant navy and other 2 siblings are in the military so we are all away from home a large amount of time.

[Deleted User]

Keep_pedalling wrote: »

What would happen to her for instance of you or one of your siblings ran into financial difficulty through illness, unemployment or divorce all of which could force the sale of her house. One of you predeceasing her is a danger as well.

Should she need residential care, then the LA would likely treat this as deliberate deprivation of assets, so would still treat her as though she had those assets in assessment for self funding.

If there are no affordable places in her current location to downsize to then she might like to consider renting somewhere in the sheltered housing / assisted living sector.

The notional agreement we have discussed making is that if any of those things happened then we would have no option but to sell it and buy her something out of the proceeds wherever it may be. It's going to down that road if we don't interject anyway as the bank will want their money back when the mortgage runs out.

Obvious additional problem comes with the idea of a divorce where other people may then have a claim on the asset.

dimbo61

Why not take Mum around a couple of council/housing association over 55,s flats or bungalows.
Check on Google which housing associations have developments in your area
Speak to CAB or local council.
My Dad was struggling with the upkeep of his old home and decided to sell when he turned 70. Best decision he for his circumstances.
Has a one bedroom apartment close to the trendy part of town.
Daily walk to the shops and cafes nearby.
No maintenance to worry about and spent most of the money he got from the sale on traveling the world to see family and enjoying 2/3/4 holidays a year.
Huge garden to potter around and other people his age to socialize with.
84 now and still happy in his apartment with No stairs and walk in shower with built in seat etc ( grab rails and warden on duty )

Cakeguts

The thing about retirement flats is that they are often cheaper than normal flats to buy so she should be able to afford a retirement flat with the equity that she has.


Some parents won't take advice from their children. You don't want to be in the position that she blames you for any part of her future housing. So it might be a good idea to leave this until she has to do something.

Larac

Cakeguts wrote: »

The thing about retirement flats is that they are often cheaper than normal flats to buy so she should be able to afford a retirement flat with the equity that she has.


Some parents won't take advice from their children. You don't want to be in the position that she blames you for any part of her future housing. So it might be a good idea to leave this until she has to do something.

Totally agree with this - it usually is some 'life-changing' event which forces these moves. My late parents left it too late to move and downsize and the house was totally unsuitable to deal with the last 5 years of my Dad's life. As a family, we had suggested 'downsizing' many years earlier. On his death, my Mum moved into a retirement complex and she halved her bills and moved into a social community. We are now selling this flat to a couple where the husband long term health prognosis is not good. These retirement flats can be cheap - as long as you don't buy a new build!