Porting a mortgage, income is private ill health pension

mrcol1000

Hello, I wondered if someone would be able to give their thoughts on my situation. 

I purchased a house with a mortgage 12 years ago on a 5 year fixed rate. A couple of years after this I had to give up work due to illness. I received an ill health pension from my employer as their doctor said that I would never be able to work again due to disability.  

With my pension and income based ESA as well as DLA I have been comfortably been able to pay the mortgage and bills to the point I have been paying overpaying for the last 5 or so years. 

My Mother in Law has been living with us the last 18months as she could not cope in her own house due to mobility problems and has now sold her house. Our house is too small for myself, my wife and my mother in law.

We have identified a house that would be suitable due to my disability. However to purchase it we would need the money she got for her house and we would need the full amount our house has been valued at. 

I just wondered if we would be able to port our mortgage based on the fact my income is partially benefits now and a private ill health pension. We are two years into a very good 5 year fixed rate deal.  I can afford it comfortably but understand it is treated as a new application and am worried they would not accept my income. My wife is my carer and only receives carers allowance. We would also have to pay a few thousand pounds for breaking the deal early if we purchased a cheaper bigger property which wouldn't need the full value of our house, only what we have paid off the mortgage. 

I also am concerned that the money would be roughly 50/50 between the money from our house and what my mother in law got for her house. I am also concerned this could cause issues. She is happy to gift the money or go on the deeds, whichever would be better. She would be living with us which we have discussed the pitfalls and issues around. 

I am just interested if this is something that is possible to do as I appreciate its not a normal situation and would want to do it properly. 

Thanks in advance to any advice or thoughts anyone has. 

Brie

Can't answer on some points specific to the disability and ill health pension but if your MiL gifts you both the money and isn't on the deeds that will need to be outlined to the mortgage company with her stating clearly that the money is a gift and that she has no claim to the house.  This can then become problematic should MiL need to go into care and she doesn't have any savings.  The local authority will consider a portion of the house hers and might push for sale or a second charge on it.  

If however MiL is on the deeds I doubt in your circumstance the LA could make you homeless to force a sale as you are all part of a family unit.  Given your disability I doubt they would push for a sale and they may in fact treat you the same as they would a spouse left living in the marital home when the other has gone into care.  This is in some part speculation on my part.  Our situation was as above where MiL gifted us money to buy a combined house.

ACG

It really depends on the lender.
You would need to speak to them. 

It would probably have been a better idea to check with them before setting your hearts on somewhere. 

prettyandfluffy

What are the exact terms of your ill health pension? I am on long-term (permanent) sick leave and am being paid by my employer's permanent health insurance.  That guarantees me a proportion of my salary as income until either I retire or return to work.  If yours is similar and you have the documentation to prove it, I can't see why it would be a problem; it is a guaranteed income, just not a salary.

mrcol1000

In the end I went to a broker who sorted it out for me and got it ported. Apparently all banks should accept an ill health pension as income and some will accept ill health state benefits.