mums house....
Discussion
Advice needed chaps...
My mum currently lives in a 3 bed semi..value in todays market roughly £160k (was £175-180k)..
Now several years ago mother dear (unbeknown to me)took out a loan from Halifax for £20K in order to tie up some existing loose ends and to get the double glazzing done and some decorating etc...
Now apparently she has taken this out as an intrest only loan (lower repayments) which is secured on the house so am I right in thinking if anything happens to mother (god forbid but she is now 75)then I as the inheritor would have to pay the loan off?
I ask as mumsie mentioned the other night that she wants to sign the house over to me now but would keep paying the loan bless her..can she do this when theres a loan against the property?
Now I still have a mortguage on my house (£37K and with an endowment that is boarder line on reaching full value in 10 years time) and would love to be able to pay the loan off for her but I cant realy afford to...
Any ideas?
My mum currently lives in a 3 bed semi..value in todays market roughly £160k (was £175-180k)..
Now several years ago mother dear (unbeknown to me)took out a loan from Halifax for £20K in order to tie up some existing loose ends and to get the double glazzing done and some decorating etc...
Now apparently she has taken this out as an intrest only loan (lower repayments) which is secured on the house so am I right in thinking if anything happens to mother (god forbid but she is now 75)then I as the inheritor would have to pay the loan off?
I ask as mumsie mentioned the other night that she wants to sign the house over to me now but would keep paying the loan bless her..can she do this when theres a loan against the property?
Now I still have a mortguage on my house (£37K and with an endowment that is boarder line on reaching full value in 10 years time) and would love to be able to pay the loan off for her but I cant realy afford to...
Any ideas?
Boosted LS1 said:
^ I don't know as I don't know how the figures stack up nowadays. It was just a thought. Is the cut off point higher?
Yes. Way higher. And if she needed to borrow £20K then there probably aren't any other assets (although wise to check).Likely she's thinking of avoiding contributing to care costs. Can't be done by simply "signing the house over" as they effectively ignore that. If that's the aim, then best to get proper advice - it can be done by putting the house into trust but the rules keep changing.
iht is 312k now but if she still lives in it it wouldn't be exempt from iht unless she paid market rent and lived 7 plus years - if she was married before then could use husbands nil rate band too effectively making it 624k without having to pay tax.
a lot of older people want to sign their properties away - if she went into care may be another factor but this would too be classed as deliberate deprivation.
a lot of older people want to sign their properties away - if she went into care may be another factor but this would too be classed as deliberate deprivation.
Thanks for the input guys..
I think mums idea reguarding signing the house over is mainly a "tidying up of her affairs" and just wants to see the house in my name..
I dont think there is any life cover on the loan as she was quite old when she took out the loan and I think the only way she got the loan was to secure it on the house??
As I said Id love to pay off the loan for her in any way but I just havnt got any savings...
What to do with the house? Well Mum wants to stay in the house as opposed to going into a home at any time which is fair enough...we will have to look at any care needs as and when needed but up to now she's fitter then me! lol.
So would the loan need repayment in full before she could sign it over? or in the event of her leaving before her time so to speek would the bank come knocking on the door demanding the full £20k streight away? In that case Id have to finance it in some way (which I cant see how) or sell the house which in these times may not be a speedy enough process for the bank?
I think mums idea reguarding signing the house over is mainly a "tidying up of her affairs" and just wants to see the house in my name..
I dont think there is any life cover on the loan as she was quite old when she took out the loan and I think the only way she got the loan was to secure it on the house??
As I said Id love to pay off the loan for her in any way but I just havnt got any savings...
What to do with the house? Well Mum wants to stay in the house as opposed to going into a home at any time which is fair enough...we will have to look at any care needs as and when needed but up to now she's fitter then me! lol.
So would the loan need repayment in full before she could sign it over? or in the event of her leaving before her time so to speek would the bank come knocking on the door demanding the full £20k streight away? In that case Id have to finance it in some way (which I cant see how) or sell the house which in these times may not be a speedy enough process for the bank?
Pilky said:
So would the loan need repayment in full before she could sign it over?
Either that, or you would have to arrange for the lender to tranfer the loan to you.Pilky said:
or in the event of her leaving before her time so to speek would the bank come knocking on the door demanding the full £20k streight away?
I would imagine that there's a charge on the house to ensure that the lender gets repaid on disposal of the house.Pilky said:
In that case Id have to finance it in some way (which I cant see how) or sell the house which in these times may not be a speedy enough process for the bank?
What you Mother ought to do is borrow the maximum amount possible against the house and go on a world cruise. If she does have care costs then they'll very quickly erode the equity in the house. Mum doesnt want anymore dbet on the house as she cant afford the loan as it is! As I see it with it being a intrest only then she's not paying anything off as it is and Im not sure on the length of the loan as it stands..
I cant pay off the loan for her as I say I havnt any savings and I have a mortguage on my house together with usual monthly outgoings means I couldnt afford an increased mortguage to cover this 20 grand loan...so at some point this 20k needs paying back and the only way to do so is sell the house???
I cant pay off the loan for her as I say I havnt any savings and I have a mortguage on my house together with usual monthly outgoings means I couldnt afford an increased mortguage to cover this 20 grand loan...so at some point this 20k needs paying back and the only way to do so is sell the house???
haworthlloyd1 said:
yes the second home would have cgt if ever sold however its a depreciating asset at the moment which could help things.
you could just ensure she has her will sorted out (i know its obvious but if she dies intestate (without one) then it may not go where you both want it to go)
it wouldn't really 'tidy her affairs' so much in all reality although if you are really bothered you could transfer the loan into your name depending on the terms of the loan as they will still have security on the property or remortgage your property
You're correct, you only escape CGT on your main residence.you could just ensure she has her will sorted out (i know its obvious but if she dies intestate (without one) then it may not go where you both want it to go)
it wouldn't really 'tidy her affairs' so much in all reality although if you are really bothered you could transfer the loan into your name depending on the terms of the loan as they will still have security on the property or remortgage your property
Best way to "tidy up the affairs" is to ensure she has an up to date will.
Deva Link said:
Pilky said:
Im not sure on the length of the loan as it stands..
It's likely to be open-ended, until sale of the house. How else could it be done?The OP needs to either get his mum to ring the lender or ring with her there so that she can give her consent for the lender to talk to him.
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