would just like to run this scenario past anyone who cares to read it to see if i've got everything covered ?

client aged 59, receives low rate care dla. partner aged 64, receives state retirement pension and pension credit in her name as a couple. rent private accommodation @ £490.00 p.c.m and receive housing and council tax benefit.

client will shortly receive £100.000.00 inheritance and they want to buy a property with the capital and take out a mortgage to meet the shortfall.

my answer to this query is that they could purchase a property and take out a mortgage of up to £100.000.00 and claim help with housing costs immediately because partner aged over 60. however, housing costs would be restricted to the amount of housing benefit they were receiving prior to taking out the mortgage, ie: £490.00 x 12 / 52 = £113.08.

does that seem right, any comments much appreciated ? thanx

Some questions

Are they in an AIP?
Will the property be bought within 6 months?
How close to 65 is the elder?
Will £113.08 cover / equal the mortgage costs?

I know this wasn't what you had in mind when you posed the question, but: have they actually found a lender who would be prepared to offer them a mortgage? Their age and the fact that they are on Pension Credit might count against them. My worry is that they could fall into the hands of a lender specialising in "difficult cases" that high street banks and building societies won't touch, and have ultra-high interest payments.

I'm starting to understand a bit more about mortgages and the elderly for various reaseons atm.

There are a number of schemes which are available in situations which might not be considered usual. Some of them are extremely expensive, typically those considered in the terms of the lenders: sub-prime, near sub-prime and complex-prime. Most of these apply to people with poor credit records, CCJs, missed payments etc. as well as to the self employed and people who self-certify their claimed incomes.

In the case of the elderly, they are more likely to be caught by the age limits which are applied and to the diffiulties and expense in finding insurance which would clear the mortgage on death. The mortgage period is difficult to determine on any repayment method.

There are, however, some schemes which may circumvent these problems. For example, the Halifax has a 40 year interest only mortgage which is designed to be cleared by sale on death.

However, it appears that the FSA may view this as an equity release (lifetime mortgage) and require the lender to jump through all the hoops that their regulations have put in place for these. I can see why they take this view even though the scheme is putting money into the house rather than taking it out.

PS For safety's sake. I AM NOT A FINANCIAL ADVISER - DO NOT RELY ON ANYTHING I SAY (What's new?)

howdo all and thanx for your responses ...

it would appear that i am heading in the right direction as none of you said otherwise so i am currently in the process of finding out if the wifes pc claim is in an assessed income period ? ... by the way, if you dont mind me asking, what relevance does an assessed income period have to my q ?

to answer your other q's, wife will be 65 10/07/06 and their intention is to buy their new home within 6 months of receiving the £100.000.00 inheritance.

am off now til tue so thanx once again for your responses and have a tickityboo bank hols weekend people, am outa here !

If they are in an AIP the 100k is ignored for the duration, regardless of whether it's earmarked for house purchase within 6 months.

hi gareth + thanx for your replies to this query,much appreciated old chap !

just to confirm that for a person to be in an assessed income period they have to be over 65, my clients wife not 65 until 10/07/06 but could the pension service send her a letter then that she is in an aip ?

apart from that would you say my initial post is the correct answer ?

cheers again !