Q I am in my 70s and have five children and several grandchildren and great grandchildren. I have had a joint mortgage with a close male friend for almost 25 years. We are not a couple. We are both disabled – me more so – and the house has been adapted to our needs.
Our joint interest-only mortgage ends in December 2017 when we will need to repay £48,000. We currently jointly own the property. My friend has no partner, an estranged sibling and cousins who do not keep in touch with him. He is younger than me.
He is my closest friend and has cared for me, laughed with me, cried with me, for all those years. However, I am concerned that when I die his family may suddenly decide that they want to contest any will he makes in my favour.
In a rather long-winded way, I am asking whether I should change from a joint mortgage to a tenancy in common, so that I can be sure my family would at some point have some money? And, by so doing, is there a clause that when I die my friend would be entitled to live in the property, or vice versa?
We currently have our house on the market but we cannot find a decent property with the money we would be left with after the sale. PM
A At the moment, because you own your house as joint tenants – rather than as tenants in common – when one of you dies, the other will automatically take over ownership of the whole property, so you would not need to worry about either of you being able to carry on living there.
If you became tenants in common, by severing the joint tenancy, you would each own a distinct share of the house, which you could leave to whoever you liked by making a will. To make sure that your friend could live in the house after your death, it would be possible to draw up a will leaving your share to your family but giving your friend a life interest in the property, which would give him the right to live there until his death, when your family would be able to sell the house. If you were tenants in common, your friend would be free either to leave his share of the house to you or anyone else, but also give you a life interest so that you didn’t lose your home.
It is extremely unlikely that your friend’s family would succeed in contesting such a will as they are not financially dependent on him.
As far as your joint mortgage goes, if you haven’t managed to sell your house to repay the £48,000 you owe, one option available to you might be to convert it to a lifetime mortgage, which is a form of equity release. This would mean that you could stay in your house and not have to make monthly interest payments (unless you wanted to) as interest could be added to the mortgage and repaid on the sale of the house after your deaths.
Remortgaging to a conventional mortgage isn’t an option because of your age. The maximum age you can be at the end of a mortgage term is 85 with the Nationwide building society, 83 with the Teachers building society, 80 with the Halifax and 75 with many other lenders.
