Local Authority - Purchase

[Whickerman]

Can anyone tell me what happens in the case of an elderly couple who are purchasing their local authority house, (where their son also resides in the house), where mortgage protestion was not an option due to their age? If they die, how does the son claim his inheritance - would the house have to be sold to cover the mortgage, or can the mortgage be transferred to his name? (Situation with my grandparents and uncle - came up as they've both been taken ill, he's moved in to look after them, his name's not on the deeds and the family agree he should have the house after their time.)

[dzug]

First of all you need to make sure that it IS his inheritance, preferably by the elderly couple making wills leaving it to him. If you rely on the rules of intestacy other family members may legally be entitled to a share. Even if they have informally agreed to give it up, it's surprising how the scent of a little money can change their minds - and their hand could be forced by eg an estranged spouse.

The son will need to take out a mortgage if he doesn't want the house to be sold. Technically I think it has to be a new mortgage but the effect is the same as transferring it.

[Ethel]

Would it be feasible to take out an endowment or life assurance policy that covers the mortgage in the event of death?

It would have to be in the parents' name, but the son could pay it. Of course, it may be too expensive to be possible, but it is an option.

Another option is to put son on both the house title and the mortgage, as a joint tenant, or tenant in common (different sorts of co-owner).

[Postdog]

I don't understand - who is paying the mortgage? I had a similar situation years ago when I moved back into the house rented from the council by my mum who was ill. Tho not on the rent book, I was allowed to purchase it with her and I paid the mortgage. When she died, because I was paying the mortgage, the house just passed to me anyway.