Paying off dad's mortgage before he loses his home?

charley1

badmemory said:

It sounds like he has been in a vicious circle of something going wrong & not being able to sort it followed by something else & not being able to face it.

Pretty much sums him up. 

_Penny_Dreadful

Lots of good advice on the thread already. My gut feeling, for what it’s worth, is that you’re going to be throwing good money after bad trying to bail your father out. 

@RAS, is spot on that a major issue is the 51 year lease. You can get an estimate of how much it will cost to extend using the Lease Advisory Service’s online calculator. 

https://www.lease-advice.org/calculator/

I also agree with @housebuyer143 that the best place for your father might be over-55’s social housing.  This would allow your father to sell the flat or for the mortgage lender to repossess, whichever happens first. 

Your father might be entitled to Pension Credit and/or other benefits. He can check online using Turn2Us or Entitled To. 

https://www.turn2us.org.uk/

https://www.entitledto.co.uk/

I realise he’s your father and you’re worried about his future. Sometimes the best thing we can do to help is to signpost people to organisations and services that can help rather than trying to fix everything for them. My guess is that buying the property, fixing it up and extending the lease will just be the tip of the iceberg financially. 

GDB2222

I know that the op is trying to do the best for her dad, but she is very close to Elder Abuse.

She proposes to buy a flat potentially worth £180k, and in return she will pay £34k for the mortgage, say £20k to extend the lease and say £20k on renovation. So, that looks like a cool £100k profit. What exactly will the OP’s brother think about this? 

Besides that, the sale by the father and lease back to him is governed by the FCA, so going ahead without their authority is illegal. 

charley1

_Penny_Dreadful said:

Lots of good advice on the thread already. My gut feeling, for what it’s worth, is that you’re going to be throwing good money after bad trying to bail your father out. 

@RAS, is spot on that a major issue is the 51 year lease. You can get an estimate of how much it will cost to extend using the Lease Advisory Service’s online calculator. 

https://www.lease-advice.org/calculator/

I also agree with @housebuyer143 that the best place for your father might be over-55’s social housing.  This would allow your father to sell the flat or for the mortgage lender to repossess, whichever happens first. 

Your father might be entitled to Pension Credit and/or other benefits. He can check online using Turn2Us or Entitled To. 

https://www.turn2us.org.uk/

https://www.entitledto.co.uk/

I realise he’s your father and you’re worried about his future. Sometimes the best thing we can do to help is to signpost people to organisations and services that can help rather than trying to fix everything for them. My guess is that buying the property, fixing it up and extending the lease will just be the tip of the iceberg financially. 

I'm starting to think social housing could definitely be the way forward, and is definitely a route I am also looking into, my priority is to make sure my dad has a safe place to live with no fear of it being taken from him so thank you for your advice and for the links they are most helpful. 

Andyjflet

I cant help with advice but just wanted to say what a wonderful daughter you are, I am 56 and I hope one day my daughter doesn't have to deal with anything like this but if she did then I'd be very grateful that she did think like you. 

charley1

GDB2222 said:

I know that the op is trying to do the best for her dad, but she is very close to Elder Abuse.

She proposes to buy a flat potentially worth £180k, and in return she will pay £34k for the mortgage, say £20k to extend the lease and say £20k on renovation. So, that looks like a cool £100k profit. What exactly will the OP’s brother think about this? 

Besides that, the sale by the father and lease back to him is governed by the FCA, so going ahead without their authority is illegal. 

Ouch thats harsh but the reason I am posting on here is for impartial advice so do appreciate your take on the situation, my brother is the same as me he just wants our dad to have a safe home with no fear of it being taken from him, I certainly don't want and will not do anything illegal so it's good to know it could be seen in that way as it is definitely not my intention. I only want to protect any money I put in and if it's possible to keep the flat in his name where my money would be paid back first before any future creditors then I would 100% be happy to do this. I will definitely be making some calls this week to the local council as well to see if over 55s social housing is an option for him 🤞🏻

charley1

Andyjflet said:

I cant help with advice but just wanted to say what a wonderful daughter you are, I am 56 and I hope one day my daughter doesn't have to deal with anything like this but if she did then I'd be very grateful that she did think like you. 

Thank you, your comment has made me smile, I love my dad and just want to do what I can to help him, he deserves a retirement without worry and I will do whatever I can to try and make that happen for him. 

Flugelhorn

@charley1 this must be so difficult - thankfully he has finally let you help out - agree social housing may be the way forward, he certainly in vulnerable and seems to be unable to care for himself. 

the whole thing is a big problem but dealing with it in bite sized chunks and getting well informed (as you are) will certainly help 

RAS

charley1 said:

.................. he has finally agreed to let me help (after years of me trying) and has now admitted he has no hot water and no power to any electrical sockets. ............Recently he has asked for some money to help cover his mortgage payments (I have done this in the past) and I agreed to again but this time only if he would finally let me help with everything, and he is now agreed to this, he hasn't opened letters in years and after getting his credit report up online it shows he has had ccjs added to his mortgage over the last 4 years meaning it's actually going up not down

Can you check how the flat is "powered"? Some are supplied via communal heating systems, and even communal power for which the leasee pays pro rata. If that is the case, the leasor may have disconnected the power to the flat if dad hasn't been paying the bills?

So it may be a matter of sorting the debts and a check of the system in the flat to get power back rather than overhaul and replacement?

GDB2222

charley1 said:

GDB2222 said:

I know that the op is trying to do the best for her dad, but she is very close to Elder Abuse.

She proposes to buy a flat potentially worth £180k, and in return she will pay £34k for the mortgage, say £20k to extend the lease and say £20k on renovation. So, that looks like a cool £100k profit. What exactly will the OP’s brother think about this? 

Besides that, the sale by the father and lease back to him is governed by the FCA, so going ahead without their authority is illegal. 

Ouch thats harsh but the reason I am posting on here is for impartial advice so do appreciate your take on the situation, my brother is the same as me he just wants our dad to have a safe home with no fear of it being taken from him, I certainly don't want and will not do anything illegal so it's good to know it could be seen in that way as it is definitely not my intention. I only want to protect any money I put in and if it's possible to keep the flat in his name where my money would be paid back first before any future creditors then I would 100% be happy to do this. I will definitely be making some calls this week to the local council as well to see if over 55s social housing is an option for him 🤞🏻

Sorry about that. I am not known for tact in my family.

I am all in favour of you helping your dad out, and I appreciate it is a difficult situation. Nevertheless, you need to ensure that you are seen not to profit from this. A loan to sort him out can be secured as a charge against the property, so you will be paid out before anyone else. 

I suggest that you do nothing without your brother's agreement. And ideally your father should have independent legal advice. 

Capital Gains Tax. At the moment, any gain in value on the flat is exempt from CGT, as it is owned by dad, and it’s his home. If you own it, you will be liable for CGT on any gain you make. So, your original plan is very poor from a tax perspective.