I have a situation that I would like some help/confirmation with the legal side of property. My wife and myself lived with her aunt in a maisonette that we purchased under the right to buy initiative. The property has all three names on the deeds and the mortgage. The mortgage has 96k to be paid, as we are all tenants her share must be minus 32k. My wife’s Aunt went into hospital last May and was taken into care by social services in July. I have telephoned Social Services and my wife has written to them. They have not returned phone calls or responded in any way. We know which home my wife’s aunt is in as Social Services told my sister-in-law. My sister-in-law also indicated that the Social Services had expressed interest in the aunts third of the property. Unless the SS can make my wife and I homeless they cannot realise the value of the aunt’s interest in the property. That would lead me to suppose that the council would use a Deferred Payment Charge. Presumably this charge would be applied on her death. However, it is in joint tenancy, the stipulation when the purchase was made is that whoever dies first their share passes to the other parties. Therefore, upon the aunt’s death her interest in the property becomes zero. Am I right in my suppositions regarding this? Any advice would be appreciated.
Deferred Payment
- Thread starter 1952WolfMan
- Start date
Hi Wolfman, welcome to TP
As Beate says, if a nephew or niece over 60 lives in the property then it is a mandatory disregard so the LA can't take it into account in a financial assessment.
Give the size of the mortgage and the fact the LA are supposed to have the first charge on the property (something the mortgage company will not want to give up) then I doubt a DPA is possible in those circumstances irrespective of your ages.
The LA may well want to know if your aunt has any interest in any property but I think they may struggle to assess her share as having and real value.
As (usually) mortgages make you "jointly and severally liable" then if you stopped paying or something fatal happened to you both then your aunt could potentially be liable for the whole of the £96k mortgage, what would the LA do then?
If the 1952 in your name is your date of birth and you're the nephew then it's all academic, if your wife is the niece and under 60 that may be different as the rules say nephew or niece over 60 not them or their partner.
K
As Beate says, if a nephew or niece over 60 lives in the property then it is a mandatory disregard so the LA can't take it into account in a financial assessment.
Give the size of the mortgage and the fact the LA are supposed to have the first charge on the property (something the mortgage company will not want to give up) then I doubt a DPA is possible in those circumstances irrespective of your ages.
The LA may well want to know if your aunt has any interest in any property but I think they may struggle to assess her share as having and real value.
As (usually) mortgages make you "jointly and severally liable" then if you stopped paying or something fatal happened to you both then your aunt could potentially be liable for the whole of the £96k mortgage, what would the LA do then?
If the 1952 in your name is your date of birth and you're the nephew then it's all academic, if your wife is the niece and under 60 that may be different as the rules say nephew or niece over 60 not them or their partner.
K
Hi, my wife is 63 and i am 66. So thanks for that, I sort of got lost in the legislation .
That's nice that you can keep the property, kind of lucky you are both over 60. 
Out of interest, what happens to her share of the mortgage now? Do you and your wife have to take over paying that?
Out of interest, what happens to her share of the mortgage now? Do you and your wife have to take over paying that?I have always paid all of the mortgage. In recent years I have also paid all of the gas and electricity bills. So it does mean that I can go for equity release and pay all of the mortgage off. Alternately as I am still working and intend to work until at least 75 I could try for a ten year mortgage instead.
Am I missing something here?
If its a mandatory disregard, then Im assuming that its the same as when a spouse is living in the house of someone who is in a care home - ie that there is no claim on the portion owned by the person in the care home all the while that the other person is living there. So there will be no deferred payment and no need to buy out the other portion.
you'd be wise to take professional legal and financial advice
and talk to your current mortgage company and check any stipulations regarding the right to buy agreement
possibly talk to the AS Helpline - link here
https://www.alzheimers.org.uk/info/...091.95410860.1516185753-1909556355.1516185753
members are only really able to offer opinions
I hope your aunt is doing well in her care home after her hospitalisation
and you get to visit her soon
and talk to your current mortgage company and check any stipulations regarding the right to buy agreement
possibly talk to the AS Helpline - link here
https://www.alzheimers.org.uk/info/...091.95410860.1516185753-1909556355.1516185753
members are only really able to offer opinions
I hope your aunt is doing well in her care home after her hospitalisation
and you get to visit her soon
Using equity release to pay off a mortgage is a bit "out of the frying pan into the fire" isn't it?
You're swapping one for of debt for another less advantageous one surely?
Unless you have an interest only mortgage or the aunt owns a fixed share of the house as tenants in common and you have/want to buy her share.
K
Hi I just want to echo the good advice others have already given you. Please try and avoid Equity Release deals - they're really not worth it. The interest is compound and does exactly the reverse of a normal mortgage - it increases. At quite an alarming rate.
I've spent a lot of time researching this for a work project and many experts believe we're heading for a financial/mis-selling scandal further down the line.
