How can my disabled son get cover for joint mortgage payments?

He is on universal credit and I’m worried that if his girlfriend is unable to work he will be liable

Q My son and his girlfriend are buying a house together. He is disabled and on universal credit and as a result, has very little income. So with our help, he is putting down half the purchase price while his girlfriend is contributing 10% in cash and will be paying the whole of the mortgage on the rest. Because they will jointly own the property, the mortgage lender is insisting on having both their names on the mortgage. She will be getting a critical illness insurance to cover the mortgage. What agreement can they draw up to ensure that he will not be liable for any of mortgage in case she cannot repay it? Would a deed of trust cover it? Can it be drawn by them or do they need to have it notarised or drawn by up a solicitor?
CL

A There is no point drawing up an agreement between your son and his girlfriend saying that he will not be liable for the mortgage payments if she is unable to pay. That’s because any such agreement won’t stop the mortgage lender considering your son to be jointly liable for the mortgage. What your son’s girlfriend can do, however, is to take out mortgage payment protection insurance (MPPI) rather than a critical illness policy. MPPI will cover mortgage payments for up to two years and pays up to £2,000 a month or 65% of your monthly income (if that is lower than £2,000) if you are unable to work – and earn – as a result of an accident, long-term illness or redundancy. Critical illness insurance does not cover monthly mortgage payments in this way. Instead it pays out a lump sum if you are diagnosed as having one of the specific life-threatening conditions listed in the policy document. So if your son’s girlfriend were to be made redundant and so unable to pay the mortgage, for example, the critical illness policy would be no help whatsoever. To avoid your son becoming liable to make mortgage payments in the event of his girlfriend’s death, they might want to consider taking out a mortgage protection policy which is a type of life insurance which pays a lump sum to pay off the outstanding mortgage in the event of the policyholder’s death.

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