Older mortgage borrowers need to consider a lasting power of attorney

Posted 7 September 2016 by Ben Salisbury

Older borrowers should consider appointing a lasting power of attorney if they are still making mortgage repayments because of the risk of Altzheimers..

Many homeowners fail to repay their mortgage in full by the time they are 65 because they borrow against their home during the mortgage repayment term or because they have been unable to get a mortgage until they are older.

This issue means that mortgage brokers need to consider whether older borrowers should have a Lasting Power of Attorney (LPA) in place, according to solicitors, Moore Blatch, who cited a recent announcement by the Building Societies Association that more than half its members will now lend to borrowers up to the age of 80 or beyond.

The solicitors warn that some borrowers may become unable to manage some or all of their financial affairs during their later years due to physical ill-health or a lack of mental capacity.

In particular, according to the NHS, the risk of contracting Alzheimer’s disease and other types of dementia increases with age, with one in 14 people over the age of 65 and one in six of people aged over 80 affected.

The purpose of an LPA is to allow an individual to appoint a third party to make decisions about their health, finance and property if they are no longer able to do this for themselves.

In relation to mortgage borrowing this includes managing mortgage repayments and how those repayments are made. If an individual contracts Alzheimers and is unable to make decisions for themselves, without an LPA, the account receiving the rent and/or paying the mortgage could be frozen which could lead to an individual or a couple defaulting on their mortgage.

Fiona Heald, partner in the court of protection team at Moore Blatch solicitors, said: “We would recommend that most people have the security of a Lasting Power of Protection in place, but particularly those who borrow at an older age.

“There is still a general lack of awareness of LPAs and why you might need one.  It is far easier than most people realise to have an LPA drafted by a solicitor and put in place and it is especially important for protecting your assets.”

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