Can I take on a mortgage of my Mom's home?

1 answer | Last updated: Sep 14, 2016
Cort asked...

I am an only child and have a Durable Power of Attorney both Health and Financial.

My mom now has Dementia and lives elsewhere. To keep up with the taxes and home improvements. I need to take out a Mortgage. I hate to do it - but the House has been paid for for over 20 years and my Mom's name is the only one on the house. I have a transfer on death deed only.

I would like to replace the roof and porch and clear up some very minor infractions to make it a rental income. ANY SUGGESTION YOU CAN PROVIDE?

Expert Answers

I know of no legal reason why you, acting as "agent" under your mother's durable power of attorney for finances, would not be able to take out a mortgage for her on her house. Of course, if the DPA restricted you from doing this, you could not. Also, an agent under a DPA is legally a fiduciary, when requires that you act in the highest good faith when you act as your mother's agent. You must act in your mother's interest, not your own.

However I don't know what a mortgage lender would actually do if you tried to obtain a mortgage on behalf of your mother under the DPA. A lender may not like this, and say no. Certainly the lender would want to know who was responsible for making the mortgage payments and evidence that the payments would be made.

So all I can suggest is to ask some lenders, and see what they say.