I have a question and hopefully someone has an answer or can point me in the right direction. My dad (with dementia) has a house that my brother has lived in for the past 20 yrs and has been making the house payments. My dad has a will stating the house would go to my brother when my dad passes. I have POA. Thank you!!
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In the housing market now, houses are worth far less than they were 7 or 8 years ago. It has slowly been getting better, but not by much. Unless the mortgage loan is much more than what the house is worth now----which I doubt it is, considering it is a 20+ year old mortgage----it wouldn't be worth refinancing. You're better off just paying off the mortgage & being 100% debt free.
You also don't say where your father is living. Does he live in the house with your brother? Does he get social security and/or retirement (pension) payments? If so, where is this money going?
How much would it cost to repair the roof? Are you looking at getting a whole new roof put on, or just some repairs on the existing roof? It may be much more worthwhile for your brother to pay for the roof repairs out of his own pocket. It wouldn't be worthwhile to refinance a mortgage if he only needs a couple thousand dollars to repair the roof. Closing costs would far exceed that. It may be wiser for your brother to take out a personal loan if the repairs exceed a couple thousand dollars. He can actually get a credit card with 0% interest for a year & a half-----if he pays it off within that amount of time, there is no interest added on. That may be a better way to go. Since the house is going to be his after your father passes anyway, he should accept the responsibility of paying for the repairs.
The bottom line is that no matter whether or not the house is being left to your brother in your father's will, or you're the POA, the deed is still in your father's name & legally, it is his house & his mortgage. If his dementia is advanced & he doesn't understand the concept of refinancing or a HELOC, he cannot sign any bank papers. It is also unfair to dump that on you father at this point in his life, in my humble opinion. Refinancing what's left of the mortgage for 10 years back into a 30 year mortgage doesn't make sense for an elderly person with dementia. Plus----the bank may not approve it based on your father's age. That is one of the things they look at, and unless your brother is put on the deed as a co-owner, your father is legally the only person responsible for that mortgage right now.
No need to refinance. Please do not involve Medicaid. Find the money.
If the answer is *no*, then Medicaid will kick in, but since your Dad owns a house, Medicaid can put a lien on the house, and once the house is sold, all proceeds will go to Medicaid. That is something the family has to think about.
And if your brother still wants to refinance the house, the Deed will need to be changed to add his name.