Posted on 18 May 2012 by Amanda
I have got into financial trouble and explored every avenue to get out of it with no success. My 74 year old mum Owns her house with no mortgage, can I somehow release some of this money by taking a mortgage of 35k to get me out of debt, the repayments on a mortgage would be realistic for me to pay as appose to the minimum payments from my creditors.
Any borrowing secured on your Mother's house will have to be in her name.
Lenders will want to be sure that your Mother is not being coerced into borrowing and her age will make it difficult for you to raise a standard mortgage. The usual requirement is that any mortgage is repaid by the age of 75 and that she must be able to afford the mortgage based on her pension income.
However, she may be able to obtain an Equity Release mortgage whereby interest is not repaid monthly but is instead rolled up and only repaid on sale of the property or if she moves into long term care.
I don't know if you have any brothers or sisters, but any borrowing on your Mother's home could adversely affect her estate should she die during the mortgage term. For this reason I recommend that you discuss your proposals with all your family and that your Mother takes independent legal and financial advice before entering into any loan agreement.
Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.