Property remortgage or sale using LPA

[alfienumeric]

I need to remortgage my father's property under the terms and conditions of his Northern Rock Lifetime mortgage as he has just entered full time nursing care. I have a Lasting Power of Attorney that has been fully registered with the Office of the Public Guardian and I thought this would allow me to act as if I was him.

Rather than sell the property and invest the money for my father I want to remortgage it to a Buy-to-Let mortgage with no ERCs. This is because I have a formal letter from a developer offering more than �200k over the current market value. The offer letter from the developer is genuine as the site will be developed as sheltered retirement homes and a care home and is not therefore affected by current market uncertainties.

Unfortunately my Dad is 79 now and suffering from Alzheimer's so cannot sign anything for himself so I need to exercise my power as attorney and protect his interests and the interest of the estate. If I buy the property from him I would have to buy below market value as I don't have sufficient to fund it myself but this would, I feel, breach the LPA as the subsequent increase in value would become mine and not be available for the other beneficiaries on his death.
Therefore I'm hoping someone has experienced a similar situation and can point me towards a sympathetic lender.

There's also a slight added complication in that shortly before dad went into care he got into difficulty with his credit cards and some are approaching default status. I have been making regular payments but his bank refused to let me know details of his account status until the LPA was in force and the OPG's service standards are six months. So, even though I started the whole registration process in March 2008, I didn't get confirmation from the OPG that the LPA was registered until 8 September 2008.

[factor-fiction]

There are lots of issues and potential minefields here. I think you may need to see a solicitor

[bednobs]

hi, you can act as if you were him. However, there isn't likely to be a company that would give a mortgage to a 79 year old with defaults (and if you are acting on his behalf that is what you are in effect)
What i dont get is why you want to remortgage if someone is offering over 200 k above market value to you? Why not just bite their hand off, accept their offer and collect over 200k on your dads behalf and put it in his bank account. Thn if he dies it will still be available to the other beneficiaries

[Richard1966]

Hi, I'm also puzzled as to why you need to re-mortgage if you have a firm offer from a developer. If the developer is asking for some money from you up front, then its a con and you should stay well clear.

[alfienumeric]

Thanks for the speedy responses.

Just to clarify, the developers want an 18 month option which means that the money is not available immediately and is subject to planning permission being obtained. So it makes sense for me to wait the eighteen months by putting tenants into the property which I can't do with the Northern Rock lifetime mortgage in place.

[Schutzengel]

This scenario doesn't seem to be in the interests of your father. A straightforward purchase would be, and the money raised would be available to pay for your father's care. The route you are looking at is fraught with all kinds of difficulties. Firstly, the developers requiring an 18 months option. At almost 80yrs of age and suffering from dementia, not wishing to be pessimistic, but 18 months is a long time at his age and condition. Secondly, planning permission can take a lot longer than 18 months, and if refused the time taken for appeals would make it even longer, and after that the developer could decide not to go ahead. It' is not very likely that a re-mortgage would be possible in the given circumstances, as you would be re-mortgaging your father's property, not yours, even given your intention to purchase the property yourself. In the event of your father passing away during such an extended waiting time, and you not being able to obtain a buy-to-let mortgage, the house would still have to be sold to provide the other beneficiaries with their share of the proceeds. It appears that there are too many variables in your plan, and would suggest you obtain some sound legal advice before deciding to do anything. Good luck.