Pay off mortgage?
Discussion
I think ( finally) that my house is sold and should complete in about 4 weeks. I am not sure whether to settle the mortgage or bank the cash and keep the mortgage running for reasons which will become apparent.
Three years ago we moved in with the in-laws to help look after the mother in law, but she sadly passed away last year. My wife gave up work to do that. Now we live with my father in law who owns 50% of the house we live in. My wife and I own the other 50% and we have a joint mortgage worth about £80k less than the value of the house we are about to sell.
The obvious thing is to pay off the mortgage with our new cash but I am slightly worried about the implications then if the father in law ends up in residential care and he is seen to own 50% of the house, have £100k in cash in the bank and no mortgage. At the moment his 50% obligation on the mortgage matches his savings so in net worth his assets are just the house. If I settle the mortgage he will have 3100k cash with no obligations which I am sure would be first port of call for the council if he needed residential care.
We currently have an offset mortgage and our combined savings are more than the mortgage, so in effect we are only paying off the capital each month.
Thoughts?
Three years ago we moved in with the in-laws to help look after the mother in law, but she sadly passed away last year. My wife gave up work to do that. Now we live with my father in law who owns 50% of the house we live in. My wife and I own the other 50% and we have a joint mortgage worth about £80k less than the value of the house we are about to sell.
The obvious thing is to pay off the mortgage with our new cash but I am slightly worried about the implications then if the father in law ends up in residential care and he is seen to own 50% of the house, have £100k in cash in the bank and no mortgage. At the moment his 50% obligation on the mortgage matches his savings so in net worth his assets are just the house. If I settle the mortgage he will have 3100k cash with no obligations which I am sure would be first port of call for the council if he needed residential care.
We currently have an offset mortgage and our combined savings are more than the mortgage, so in effect we are only paying off the capital each month.
Thoughts?
There is no mortgage on the house we are selling, we live with the father in law in a house we bought between us with some of his capital, some of ours and a mortgage making up the difference. the house we n ow have is adapted for disabled living whereas their old house had stairs.
I get the moral indignation that I am somehow trying to avoid care home charges but on paper he has 50% in the house and if I pay the mortgage off it looks like he has a 50% share in a house with £200K less on the mortgage. His estate needs to reflect the fact that we have paid off the £200k, not him. He could pay off his half (just) but it would leave him with nothing in the bank. And secondly, I think he, and we, have done our bit. He and his wife paid taxes and NI for 50 years, we have done it for 30 years and we cared for her at home with no recourse to the public purse for years. In fact had she not passed away quite quickly at the end we had plans to spend £2k a week having carers on site to keep her with us in her final months. His brother had the same opportunities to save and build a safety net and chose to spunk it on beer, cigs and holidays (and cars) and now gets all his care bills paid. The old fella saved, was careful and went without. This Govt. seem to recognise that and if they gave him the opportunity to pay a fixed sum and have any future care bills taken care of he would take it.
I get the moral indignation that I am somehow trying to avoid care home charges but on paper he has 50% in the house and if I pay the mortgage off it looks like he has a 50% share in a house with £200K less on the mortgage. His estate needs to reflect the fact that we have paid off the £200k, not him. He could pay off his half (just) but it would leave him with nothing in the bank. And secondly, I think he, and we, have done our bit. He and his wife paid taxes and NI for 50 years, we have done it for 30 years and we cared for her at home with no recourse to the public purse for years. In fact had she not passed away quite quickly at the end we had plans to spend £2k a week having carers on site to keep her with us in her final months. His brother had the same opportunities to save and build a safety net and chose to spunk it on beer, cigs and holidays (and cars) and now gets all his care bills paid. The old fella saved, was careful and went without. This Govt. seem to recognise that and if they gave him the opportunity to pay a fixed sum and have any future care bills taken care of he would take it.
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