Mortgage help for my mum

sunny-day_2

Okay, so my Dad just passed away leaving my Mum with an outstanding mortgage of £45k. My mum is retired and only has her state pension no savings unfortunately. Mum mum and Dad have been in an interest only Mortgage with LLoyds and the term ends August 2023, so have 14 months left to repay. Around 3 or 4 years ago my Dad went to discuss the outstanding mortgage with a local mortgage advisor at the local branch of Lloyds. At that point there was approx £82k outstanding. His advise was to remain on interest only and make over payments. They have religiously paid these at £700 per month (with my help) I am their son also loving at the property and not on the mortgage. So now reduced to £45k. My Dad passed away last week so we have just registered this with Lloyds and we wanted to discuss the outstanding amount with the “end of term team” I have to say the lady I was speaking to didn’t fill me with much confidence at all that they could help. At first I was placed on hold whilst she said she’d check with a colleague if it is a tenancy mortgage to see if first they can help or not. Then 20 minutes later she said yes they can discuss it. She didn’t let me get a word in and just talked at me saying how it should have been paid off in the original term, so after being made to feel unworthy of not being able to afford to pay it off sooner and her telling me that they want me to call back with my mums income and outgoings so they can do an affordability check and I said I don’t have those details yet but could get them she asked if there was anything else she could help me with…so only at that point could I speak to explain that my mum and Dad have been making overpayments as advised by their local branch mortgage advisor so that towards the end of the term we could discuss with the end of term team a re payments plan. I also suggested extending the original term by 2 years which we worked out would be sufficient time for the remaining mortgage to be paid off. To be met with “well, we have to do the affordability check first to know what the options are and if they can’t reach an option or help” I was left along with my mum feeling utter despair. So we are to call back with my mums in going’s and outgoings all of which she has no remaining funds to be able to pay and as I explained it would be myself who would be making these overpayments however she told me I wouldn’t be take into consideration because I am not on the mortgage and cannot be. So I see no other way of repaying the outstanding money if they don’t extend the term??? Any advice would be appreciated, could I get a mortgage with a different lender myself and pay off my mums? Willing to do that. We don’t want to sell. 

Grumpy_chap

Sorry for your loss, OP.

I can't advise on the OP's question, but can I suggest that the Mum should consider reviewing her Will plus the OP needs to understand whether there will be any IHT liability if the OP anticipates inheriting the property at a future point.  Many Estates are of insufficient value to be subject to IHT.  The OP should also try to understand how care for Mum will be funded if the OP is to be sure that the shared home is not to be used as the funding.  This would all be doubly harsh on the OP given the financial contribution from the OP to the mortgage.

I know the last thing the OP wanted to hear is just more questions, but I am only mentioning these considerations in a helpful manner.  It may be that these factors have all been addressed previously.

MWT

How old is your mother and is she generally in good health for her age?

How much would you estimate the property is currently worth and is it of normal construction and in a good state of repair?

Thrugelmir

Appreciate that you have no wish to sell the property but it has to be a primary consideration. Appears that tackling the mortgage debt was left far too late. What was your parents plan when the mortgage term came to an end? 

sunny-day_2

My mum is 68 and in good health yes. The property is worth £165k and normal construction good condition. She wants to stay living in the house as it’s home. I was thinking I should get independent financial advice as it doesn’t seem her current lender actually want to help. I’m happy to contribute towards paying off the mortgage but need time as I don’t have the funds outright. Time her lender isn’t giving. I’m happy to get a mortgage and pay hers off if it’s a possibility. I understand there’s be IHT etc so may need to speak to a solicitor? To address everything. I anticipate £45k won’t take too long to pay off, maybe 3-4 years for me

sunny-day_2

So my mum and Dad went onto interest only as my mum fell seriously ill some years ago and my Dad finished work to look after her, she recovered however fell ill again another 2 times and so they were never in a position to restart paying the capital although they tried to as made an appointment with the lender but the amount they wanted was to high so they had to remain in interest only. Initially they took out and paid into an endowment which did not perform and they lost what they’d paid into it. My Mum and Dad have always been hard working and willing to pay for everything it was due to bad circumstances and illness which impacted on their ability to repay this sooner. My Dad fell ill 3 years ago and sadly passed away only 2 weeks ago. I’m living here as their son and willing to help as I work full time and so can pay my mum to make the overpayments. I have some savings too so I worked out by using my savings and making overpayments each month at the end of the original term I could get the mortgage down to £20k. I’d just need extra time to continue making payments for approx 24 months which Lloyds don’t appear to want to do. That’s the predicament. So, should or could I get a mortgage for £20k and pay off my mums mortgage? Is that something I could do seeing as Lloyds won’t help? 

Sistergold

Sorry to hear about your loss. I would like to commend you for looking out for your mom. £45k is certainly not too huge a figure to pay off. Your mom and dad also did well in the overpayments despite the late start. I hope you can work something out to sort it out. 

K_S

@sunny-day_2 If you have sufficient income (pretty much any kind of regular income actually given the relatively small size of the mortgage), it should be fairly easy to remortgage (change lenders) to a capital-repayment mortgage with yourself on the mortgage. You can stay off the deeds (to preserve your FTB status, etc.) if you wish to with a Joint Borrower Sole Proprietor mortgage where your income will be taken into consideration. Your mother's age will take some lenders off of the table, but you should still have options.

Unless you have some particular reason to stick with Lloyds, I would recommend getting in touch with a whole of market broker who can look at the whole scenario and give you a realistic picture of your options.

The MSE guide here can help you find one https://www.moneysavingexpert.com/mortgages/best-mortgages-cashback/#step3

sunny-day_2

Thank you that sounds like great advice. Really appreciate this. I think I will remortgage change lenders from Lloyd’s, they haven’t helped whatsoever and the person o spoke with yesterday in the end of term team was rude, condescending and judgmental I felt. Didn’t listen to me, made me feel we were nothing at a time we reached out to them for help we received no support at all. I know we’re just a number in reality. So Thank you for your kind support I’ll get in touch with a mortgage broker as you mentioned and remortgage with a different lender to pay the remainder off

MWT

sunny-day_2 said:

My mum is 68 and in good health yes. The property is worth £165k and normal construction good condition. She wants to stay living in the house as it’s home. I was thinking I should get independent financial advice as it doesn’t seem her current lender actually want to help.

Do go and talk to a good broker as suggested above, there are other options for your mother, but no need to go there if you can sort out a mortgage in your name.

sunny-day_2

Thank you, sounds good advice and willing to do that to pay it off. Really appreciate the advice