Lifetime Mortgage

[Randomfifty4]

Hi, I’m after some advice……….

I have POA for my mum’s health and financial affairs. When my father passed away years ago, he left my mum in debt with no prospect of paying the outstanding mortgage on the property. As such, we took out a lifetime mortgage which was the only viable option at the time. Since that time, mum has now accrued sufficient savings to enable us to finally pay off the lifetime mortgage to prevent further interest from being accrued. However, this would leave her with substantially less than £23K in savings and her care provision (that mum currently pays for) would need to be paid by the local authority but I’m not sure how they would view this.

Any advice would be greatly appreciated.

 

[Jaded'n'faded]

Is your mum still living in the house?

 

[SAP]

If your mum is in residential care I suspect that the LA will accept that the debt needs to be paid off and will then expect you to sell it to pay for your mums care ( unless there is someone over60 living there or any of the other reasons for a property to be discounted.)
If she lives at home then I would speak with the finance assessment team because one way or another the dept will need to be paid for from your mums finances and property.

 

[sdmhred]

As @SAP suggests contact the LA finance team for advice. I’m a little paranoid about these things so would do via email so you have any advice in writing for the future!

 

[nitram]

Does the document say anything about early termination due to entry into residential care?

 

[Randomfifty4]

Mum does still live at home. My thinking is that it can't be classed as 'deprivation of assets', because she wouldn't be deprived. If anything, it would be advantageous to do this. I will double check the documentation but I believe there were only two provisions for early termination. One is when the debt is cleared in full and the other is due to entry into residential care.

 

[nitram]

Check with the LA finance section, I would regard terminating the agreement as paying a debt which is allowed.

You need to consider when Mum is likely to need residential care with any beneficial termination fee and interest paid until that time.

 

[Randomfifty4]

Check with the LA finance section, I would regard terminating the agreement as paying a debt which is allowed.

You need to consider when Mum is likely to need residential care with any beneficial termination fee and interest paid until that time.

This query is in relation to potential social care rather than residential care at present.............

 

[nitram]

This query is in relation to potential social care rather than residential care at present.............

I think clearing the debt would be allowed by the LA, check this.

Until cleared interest will have to be paid.
Check the penalty for early termination 'because you want to' and 'because mum is going into residential care'.