Selling house to pay for care

[JIMLCHIPIT]

A friend of mines lone parent has to go into care and they have to sell the home to pay for care, has anyone else been though this.

They have asked if i could buy the house at a discounted rate on a buy to let mortgage and then sell it later to protect the capital in it. I could make any profit on the current valuation or if prices fell i could keep any interest that i had paid. My friend would benefit from the cash not being swallowed up social security as it would be secured in my property.

Now it all sounds very good and i am all against the pay your motgage for life and then lose it all paying for care but it's really a grey area to me. I would be a neutral party so surely i couldn't be held responsible for buying a cheap property could i?

If anyone has any know how on this or experience i would be very grateful.
I know it's going to involve a lot of trust and business and friendships can go badly wrong but it could also be a good investment.

 

[pil196]

i don't know what to say to this as i had an aunt that went in to a care home and i know she had over 100.000 in the bank but over the years this ran out and the house had to be put up just how much dose it cost for care in an a home??

 

[JIMLCHIPIT]

i believe it's about £700 per week, it's mental!

 

[charlie senator]

Your cheaper booking into a good hotel on full board . It's a disgrace IMO .Someone who's wasted their life away on social will be in the next room to her at no charge !!

 

[pil196]

Your cheaper booking into a good hotel on full board . It's a disgrace IMO .Someone who's wasted their life away on social will be in the next room to her at no charge !!

that's so feking annoying but its true.

 

[Jooooles]

Your cheaper booking into a good hotel on full board . It's a disgrace IMO .Someone who's wasted their life away on social will be in the next room to her at no charge !!

My mum past away in a similar situation the local hospital run by NHS actually provided better care then the privately run ones, we were in too minds which way to turn.

She only had weeks to live and there was no cure we either had to auction her house for pennies to go for private care or take the NHS route with partly funding or selfs.

The hospice she passed away in done the best they could and I could not fault the NHS services for the help they gave.

I do not think selling a house quickly will help the situation there minds will not be in the right place at the moment ?

I know its not a matter of weeks like are family had to deal with but I would not get involved in the sale my friend ?

Your doing them a favour but if you were going to live in it and stay there for a life time it is a good thing ?

What happens if you sell the property a year later and make a nice profit how would you feel ?

More important how would your friend feel about it after he was in a stable frame of mind ?

mad situation but I would personally advise the family to hold on to the house till they get a proper sale to the real value of the house?

:Fish:

 

[Jooooles]

Your cheaper booking into a good hotel on full board . It's a disgrace IMO .Someone who's wasted their life away on social will be in the next room to her at no charge !!

I know exactly what you mean charlie m8 Its a heart breaking situation when you want the best for your family, but I,m afraid when It comes to the end of someones life or retirement It doesn't matter If you have millions or pennies It,s just being there that counts.

:Fish:

 

[pil196]

My mum past away in a similar situation the local hospital run by NHS actually provided better care then the privately run ones, we were in too minds which way to turn.

She only had weeks to live and there was no cure we either had to auction her house for pennies to go for private care or take the NHS route with partly funding or selfs.

The hospice she passed away in done the best they could and I could not fault the NHS services for the help they gave.

I do not think selling a house quickly will help the situation there minds will not be in the right place at the moment ?

I know its not a matter of weeks like are family had to deal with but I would not get involved in the sale my friend ?

Your doing them a favour but if you were going to live in it and stay there for a life time it is a good thing ?

What happens if you sell the property a year later and make a nice profit how would you feel ?

More important how would your friend feel about it after he was in a stable frame of mind ?

mad situation but I would personally advise the family to hold on to the house till they get a proper sale to the real value of the house?

:Fish:

we went down that road but as my aunt had never had any sort of benefits in her life and was getting my uncles war pension there was no alternative it really makes you mad as some with nothing can get all the help they need don't get me wrong if you have nothing then why should it be a struggle but if you save hard and put it away why should you pay top dollar for it

 

[Munkey]

This is very sad.

You can buy the house for whatever price your friend decides to sell at, there is no law against gifting money away. This type of practice is quite common when short term funds need to be raised from the sale of a house to a friend or relative.

Just make sure that a buy back clause exists when the transaction takes place, this will protect your friends mothers best interests.

 

[stew1954]

Not sure but I don't think you can sell your home at a discount once it's known that your going into care it has to be the market rate.

 

[ManofScience]

when my parents died, my brother went into a care home as he's disabled. His share of the interitance had to pay for his medical care until it was down to a certain level (about £12,000) then the state took over.

it's a sad fact but what can be done.

 

[scooby9858]

could you not rent her house out and that would pay the care.or get someone to move in with her to give 24hr care.

 

[JIMLCHIPIT]

ok we spoke to a solicitor today and as somone posted you cannot gift money away, a statement of means has been carried out the house is about £5000 undervalued and not worth the trouble of trying to fiddle.

Renting is not an option as one months rent only pays for 1 weeks care!

The sale of the house will pay for three years care and then his inheritance will be gone apart from the minumum £11,500. It is tragic.

My friend wants his mother to have the best of her remaining time but his parents bought the house to be able to leave inheritance to their two sons.

He is not under a court order to sell the house but he feels that it is the next stage as several letters have been sent. The solicitor siad wait until a court order but then they would as they get some work out of it.

My friend is not going to wait as he can deal with it at his own pace with minimum stress.

The comment about not getting involved with other peoles family issues is a good one but in this case it is a strong friendship and we were going to get an written agreement drawn up. Any market increase was agreed that it would be repayment of the loan (which would have had interest paid on it away). Obviously it doesn't matter now.

My advice is if you have a LONE retired parent they should sign the house over to a trusted person, they pay rent then to that person who can return the rent in another form. Paying utilites on top etc. After 5 years then the social cannot claim the house. Unfortunatley people never look that far ahead and don't ever predict that the situation could arise.

Can anyone remind me what we pay NI for?, i am now of the opinion that it maybe doesn't pay to own your own house when you retire!

Thanks for all your comments and support on this and please feel free to continue adding any experiences on this thread as its all been a real eye opener to me. Age concerns website has some good info on it if anyone is interested.

 

[MFCGMFC]

tell the social to feck off mate!

up here in scotland, if the patient has dementia and cant control their own finances then the next of kin can apply for power of attorney and then has total control over the patients finances, if you have over £6k in the bank then you must pay for yer care

if the patient is still fully compes-mentis then get them to sign their house over to their next of kin immediately!

then the social cant force you to sell it to pay for care because then the house does not legally belong to the patient

so less than £6k and no house = the social having to pay for the care

in scotland its £581 per week for a care home

hope this helps mucker

Cheers
MFCGAVMFC

 

[prash_2k]

Hi JIMLCHIPIT,

If you wanted to go ahead it would be completely legal. What i would advise is buy the house on a fixed rate mortage, at whatever price you agree and put down a 10% deposite ( that the minimum of a fixed rate)

After owneing the house for a month or two switch to an intrest only buy to let mortage (there may be a small fee).

IF you go for intrest only buy to let mortage first you will pay a higher rate and need a minimum 25% deposite.

Put the house on rent at 120% of the mortage. The extra 20% will help you pay for any fixing that needs doing due to general wear and tear.

Once you've done this in about 20years you'l own in outright minimum hassel maximum profits.

hope this helps

 

[JIMLCHIPIT]

PRASH 2K Thanks for the advice but it's not legal as a statement of means has been carried out, therefore any gifting or selling at reduced rate is viewed as avoidance of paying the fees and the courts can persue the funds gifted away. The house had been valued by someone so any major deviation on price would be investigated.

This is from the solictor.

 

[DW190]

Has the council registered a charge on the property? Does your friend have power of attorney?

Friend of mines grandmother was in care home and the council registered a charge on the property. Luckily he had power of attorney so we got a slightly bent agent to value the property together with another agent. (£1,000 backhander) Low valuation due to the boarded up windows, overgrown garden.

I was going to buy the house at the knock down price and give him 15k. More luck was the guy who lived next door wanted to buy it so the deal was done directly with him.

There was very little left for the council and it certainly didn't cover the four years she had been in the care home.

Anyone with ageing parents with property should seriously consider a deed of gift to their children or transferring the property to them well before they loose the marbles.

 

[geoffthechef]

Anyone playing with houses in this market is going to get burnt...why are banks asking for big deposits? because they want you to lose your money first..we are just beggining this reccession/depression and house prices are overvalued by 30% at the least...wait untilv the money taps get turned off...its just like trying to cure a herion addict by giving him more herion...its cured nothing but bought time....the next 12 months are going to be painful for many and god help you if you are in the bloated public sector...

 

[gordy11]

ok we spoke to a solicitor today and as somone posted you cannot gift money away, a statement of means has been carried out the house is about £5000 undervalued and not worth the trouble of trying to fiddle.

Renting is not an option as one months rent only pays for 1 weeks care!

The sale of the house will pay for three years care and then his inheritance will be gone apart from the minumum £11,500. It is tragic.

My friend wants his mother to have the best of her remaining time but his parents bought the house to be able to leave inheritance to their two sons.

He is not under a court order to sell the house but he feels that it is the next stage as several letters have been sent. The solicitor siad wait until a court order but then they would as they get some work out of it.

My friend is not going to wait as he can deal with it at his own pace with minimum stress.

The comment about not getting involved with other peoles family issues is a good one but in this case it is a strong friendship and we were going to get an written agreement drawn up. Any market increase was agreed that it would be repayment of the loan (which would have had interest paid on it away). Obviously it doesn't matter now.

My advice is if you have a LONE retired parent they should sign the house over to a trusted person, they pay rent then to that person who can return the rent in another form. Paying utilites on top etc. After 5 years then the social cannot claim the house. Unfortunatley people never look that far ahead and don't ever predict that the situation could arise.

Can anyone remind me what we pay NI for?, i am now of the opinion that it maybe doesn't pay to own your own house when you retire!

Thanks for all your comments and support on this and please feel free to continue adding any experiences on this thread as its all been a real eye opener to me. Age concerns website has some good info on it if anyone is interested.

It is a rip off so lets all do something about it ive got the link here to start
a petition on No 10 website ill sign it how about you.
e-Petitions | Number10.gov.uk

 

[steve1978]

its a bit late in the day now but anyone who is in a similar position needs to get houses signed over to relatives asap to avoid these issues. i have 5 houses that i rent out but no equity. if i go in to a home (i am only 31 lol) they will take them all one at a time