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Need to organise finances as unwell, could be serious

(17 Posts)
Unmumsy1 Sun 13-Oct-13 13:26:23

How do I ensure my kids keep their home in the event of my demise?
The mortgage is interest only, 20 yrs on the term. DS1 is 27 and apart from Uni, has always lived here. DS2 and DS3 14 and 17.
Should I put DS1 on mortgage? Will this prevent reposession in the event of my death? Presumably if he is on mortgage and keeps up repayments, he can't be chucked out?
Going into hosp tomorrow, any advice appreciated. Doing new will now :-).

debtcamel Sun 13-Oct-13 13:50:24

I'm sorry to hear you are going into hospital and I hope everything goes well.

"Will this prevent reposession in the event of my death? " yes if he is on the mortgage AND can make the mortgage repayments - can he? Does he have enough income to justify a mortgage that size?

Do you have any life assurance? Any pensions, if so, have you nominated who the money will go to if you die? Do you have any debts apart from the mortgage?

Unmumsy1 Sun 13-Oct-13 14:37:10

No life insurance or critical illness, some debts CCs (unsecured). Eldest son has no income but I will pass on the BTL property to him which brings in a good income. The younger boys wd have sufficient income to cover the mortgage from child maintenance, their father is extremely disinterested, but I am sure he would continue paying.

(That's the deal, he pays on the dot and we make absolutely no time/support/parenting/emotional/social demands. He pays happily to ensure his children are not even seen, let alone heard.)

I do have a NHS pension of about £20k but I thought that could only go to a spouse?

Thanks for replying.

debtcamel Sun 13-Oct-13 15:33:31

NHS pension - child dependents:

Why does your eldest son have no income? If he has no income, mortgage company may not be happy with him being on the mortgage. Is he happy with the idea of bringing up younger siblings?

BTL property - how much equity? It would probably be better to plan on selling the BTL and paying off the unsecured debts and then as much as possible of the mortgage on the house.

Who are you leaving as guardians of the younger children? Money/ property left to them will have to be held in trust.

Unmumsy1 Sun 13-Oct-13 16:06:41

Thanks for link. Eldest son disabled (gets Dla) but despite this has helped me bring up younger two. All three inseparable, no question, he would bring them up happily.
Am leaving everything to eldest for simplicity, and he is nominated as their guardian.

BTL property has equity, but not enough to make a dent in home mortgage. The boys cd all move to the BTL, it's a lovely house, and rent out the 'home' to cover the mortgage. They will have lots of options, but I just want to set up some stability while ds3 does his GCSEs.

Re: mortgage company, I thought I had read that he has a right to have his name on mortgage because he lives here.
Obviously while I am alive, I am responsible for payments. Once I go, the child maintenance could be paid directly to the mortgage company, which would circumvent his "income" problems. Also he is actively seeking work, so I just want to ensure the boys all stay in their home while grieving, and until 14 yr old finishes school at 18.

debtcamel Sun 13-Oct-13 16:32:04

OK, I see the shape of the problem rather better now. Stability is the essential thing here IMO (my husband died when my kids were tiny and I was so grateful our finances let me stay in our house so the kids could carry on going to same school.)

Your credit cards are going to have to be cleared when you die. If you dont have the money in the bank, then the obvious place to get the cash to do this is by selling the BTL.

This would also have the other large advantage of simplifying things for your eldest - he is going to have a lot on his plate coping with his siblings and sorting out your estate. I'm not just talking about the admin, getting them to school and paying the bills etc, but the emotional side as well. Adding the running of a BTL to that is I think undesirable, especially with the loss of your wage. The boiler blowing up or tenants stopping paying the rent and having to be evicted could turn into a nightmare for him.

re your mortgage on the main house. Have you looked to see if there are any terms which relate to what happens when you die?

I thought you needed your lenders consent to add someone to your mortgage.

Rockchick1984 Sun 13-Oct-13 16:54:06

The simplest solution here would be to take life insurance to cover the mortgage and unsecured debts as a minimum, so that if something happened to you then your DS could repay the mortgage and own the house outright.

LIZS Sun 13-Oct-13 16:56:18

Would they cover a pre-existing condition though ?

SantiagoToots Sun 13-Oct-13 18:10:10

What financial plan/repayment vehicle do you have in place to pay off the mortgage at the end of term? Can't you cash that in?

LIZS Sun 13-Oct-13 18:45:31

Perhaps critical illness cover ?

Unmumsy1 Sun 13-Oct-13 18:53:04

Mortgage is interest only no repayment plan. Nothing to cash in. Life insurance is an idea, if all goes well tomorrow I shall look into that.

Finances are a mess because ds1 and hubby both had cancer. Hubby died in May. It was like a kick in the stomach it hurt so much, and having got ds1 through 5 years of chemo surgery etc etc I just caved in.

As you so rightly say debtcamel, it's the emotional toll that will floor the boys and stability is the most important thing.

Fingers crossed for tomorrow and whatever happens, looks like I have some homework to do ;-).

Thanks for comments, at least it Downton tonight, that will take my mind off things ;-).

Unmumsy1 Sun 13-Oct-13 18:55:19

I ran out of money and stopped paying critical illness and life insurance. Hierarchy of needs: food and heating came first. Ho hum.

debtcamel Sun 13-Oct-13 19:01:30

I'll be thinking of you tomorrow - fingers crossed!

SPBisResisting Sun 13-Oct-13 19:01:50

What a horrible situation OP. It sounds like you have lovely boys, and it sounds like that's all down to you.
I am crossing my fingers for tomorrow.

Unmumsy1 Sun 13-Oct-13 19:05:39

Lol just got on online quote and it wd cost £100 pcm for life cover of £31,000. Not worth doing. Will look again tomorrow.

debtcamel Sun 13-Oct-13 20:12:17

"it wd cost £100 pcm for life cover of £31,000" & that would not cover any existing conditions!

Assuming you get through tomorrow and the following days, you do need a rethink on your finances, so that you start to repay this mortgage and clear your credit cards. But they don't matter at the moment - log off the internet and go and do something with your kids smile

Rockchick1984 Sun 13-Oct-13 23:22:50

Debtcamel at that price it will include cover for existing conditions - that's why the premium is so high.

Good luck for tomorrow, I hope everything goes well for you thanks

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