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Advice on using selling my Mum's house in 2-3 years and what to do after
krazyk
Posts: 265 Forumite
I should receive my inheritance early next year of about £55-65k and looking for advice. "Part 1" is sorting what to do with the money now(info on this is here https://forums.moneysavingexpert.com/discussion/comment/69514743#Comment_69514743). "Part 2" is what to do in 2-3 years time when my Mum's mortgage should be paid off as well as my credit rating should dramatically improve when I, finally, will be clear of debt and the defaults I have.
My Mum currently has a house with an interest mortgage. Unfortunately she can only afford the interest so the mortgage is still very high after 15 years at £55k (she is retired and claiming Attendance Allowance as she had a stroke 2.5 years ago. She really needs a small retirement home on a single floor property with perhaps a communal area if we can find such a thing in Kent.
RBS have given her an extension on the mortgage, which takes her up to 2018-19 I believe. So we have some time to spare but by then we need to repay the mortgage in full so the only way is to sell it. The valuation of the house could be as high as £200k but I suspect the reality would be around £180k. This easily pays off the mortgage but what to do next?
The options are for her to rent and live off the potential £145k (less fees) for the rest of her life. Or buy another home, which seems to be around about £100k. For the latter she would have enough to pay for house outright and leave her with a bit to play around with (roughly £30-40k after expenses).
It's hard to tell how much she would eat into the £145k if she rented. I've tried to produce a monthly budget for all scenarios. Her state pension is £750 per month. This covers most of her outgoings alone. With attendance allowance she is in profit. Without this, the interest from £145k would easily cover her shortcomings each month so could be safe either way. But from researching I can't see a reason they would stop attendance allowance so she might be comfortable. However, I do remember when we went through things a couple of years ago that there was a limit on the savings you could have before your benefits were affected. If she rented her savings could be as high as £145k, if buys it could be £30-40k. I think there was a limit of £10-16k but cannot remember what it was on specifically. Can anyone help? Any advice on any of this would be most welcome.
My Mum currently has a house with an interest mortgage. Unfortunately she can only afford the interest so the mortgage is still very high after 15 years at £55k (she is retired and claiming Attendance Allowance as she had a stroke 2.5 years ago. She really needs a small retirement home on a single floor property with perhaps a communal area if we can find such a thing in Kent.
RBS have given her an extension on the mortgage, which takes her up to 2018-19 I believe. So we have some time to spare but by then we need to repay the mortgage in full so the only way is to sell it. The valuation of the house could be as high as £200k but I suspect the reality would be around £180k. This easily pays off the mortgage but what to do next?
The options are for her to rent and live off the potential £145k (less fees) for the rest of her life. Or buy another home, which seems to be around about £100k. For the latter she would have enough to pay for house outright and leave her with a bit to play around with (roughly £30-40k after expenses).
It's hard to tell how much she would eat into the £145k if she rented. I've tried to produce a monthly budget for all scenarios. Her state pension is £750 per month. This covers most of her outgoings alone. With attendance allowance she is in profit. Without this, the interest from £145k would easily cover her shortcomings each month so could be safe either way. But from researching I can't see a reason they would stop attendance allowance so she might be comfortable. However, I do remember when we went through things a couple of years ago that there was a limit on the savings you could have before your benefits were affected. If she rented her savings could be as high as £145k, if buys it could be £30-40k. I think there was a limit of £10-16k but cannot remember what it was on specifically. Can anyone help? Any advice on any of this would be most welcome.
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Comments
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Would your mum be able to get a BTL mortgage?0
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Attendance Allowance is a tax-free benefit for people aged 65 or over with attention or supervision needs resulting from a mental or physical disability. Attendance allowance is not based on National Insurance Contributions (NICs), is not affected by savings or income and can be paid on top of other benefits.
Attendance Allowance | Rights 4 Seniors
www.rights4seniors.net/content/attendance-allowanceIt's someone else's fault.0 -
Is this inheritance coming from your alive mum?
What happens if she gifts you all this cash then needs it in the future?Never, under any circumstances, take a sleeping pill and a laxative on the same night.0 -
Super, thanks for the info.0
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The inheritance is coming from my late aunt's house, which has just been sold and to be finalised, hopefully, mid-January.0
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We currently don't have any plans to buy-to-let. She needs to move from her currently too big house to a smaller one floor house as she is in a wheelchair and cannot maintain such a big house.0
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A pensioner be given a mortgage ?
I thought that letting the mother's house out was an option but I see the OP means her selling the property and becoming a tenant rather than keeping the house and being a landlord.
I asked about the mortgage as if she couldn't get one (not just due to age but due to income) then it would have been a non starter but it's a non starter because it was never an option.0 -
We currently don't have any plans to buy-to-let. She needs to move from her currently too big house to a smaller one floor house as she is in a wheelchair and cannot maintain such a big house.
Sell the house and buy a smaller one. That way it should be relatively straightforward to carry out any adaptations that she might require. If she were to rent privately she could be faced with moving again at some point in the future and landlords might not be so keen to adapt the property for a wheelchair user.0 -
http://www.housingcare.org/sheltered-housing/area-1-kent.aspx
Sheltered housing might be a possibility?0
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