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  • FIRST POST
    • iamugly
    • By iamugly 12th Jun 17, 7:46 AM
    • 7Posts
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    iamugly
    Son getting mortgage for parents to buy house
    • #1
    • 12th Jun 17, 7:46 AM
    Son getting mortgage for parents to buy house 12th Jun 17 at 7:46 AM
    Hi,
    Me and wife have inherited a half share of a house that has just sold.
    We need to buy a new home as we currently live in the inherited house (late fathers house and we moved into it when he went into a home, has since passed away)

    We need a bungalow due to my care needs, my wife is my carer so neither of us can work at the moment.
    We are about 30k short of getting the home we want and our son has offered to get a mortgage for 30k to add to our inherited money so we can buy it.
    Neither me or wife can get a mortgage as bad credit and in an arrangement to pay large debts.
    Would son be able to get a mortgage without putting any of his own money down as a deposit?
    what I mean is would the mortgage people consider our cash payment as his deposit?

    Any advice?
    Thanks
Page 1
    • csgohan4
    • By csgohan4 12th Jun 17, 8:21 AM
    • 3,476 Posts
    • 2,157 Thanks
    csgohan4
    • #2
    • 12th Jun 17, 8:21 AM
    • #2
    • 12th Jun 17, 8:21 AM
    it would have to be a gifted deposit, but then it puts your son under legal responsibilities such as being a Landlord with tax implications as well.


    Not to mention a lot of lenders frown upon letting relatives stay in the house while your son is not there. Since your son is not living there it would be a buy to let and therefore stricter criteria.


    I would be careful about this, money and family generally don't mix and your son and you have a lot to lose if this goes wrong. If you son already has a house he would have to pay extra stamp duty as well.


    If you son wants to get married and wants a place for himself it would cost him more since he already has a house which you occupy and it sounds like you won't be able to pay your son given your large debts.


    I would hit the debtfreewannabee forums to reduce your debts. Consider finding a cheaper house/flat to live in
    "It is prudent when shopping for something important, not to limit yourself to Pound land"
    • getmore4less
    • By getmore4less 12th Jun 17, 8:27 AM
    • 28,754 Posts
    • 17,196 Thanks
    getmore4less
    • #3
    • 12th Jun 17, 8:27 AM
    • #3
    • 12th Jun 17, 8:27 AM
    Have you told your creditors of your new financial position?
    • debtisnotme
    • By debtisnotme 12th Jun 17, 8:43 AM
    • 47 Posts
    • 23 Thanks
    debtisnotme
    • #4
    • 12th Jun 17, 8:43 AM
    • #4
    • 12th Jun 17, 8:43 AM
    Have you told your creditors of your new financial position?
    Originally posted by getmore4less
    I think securing a roof over their heads is more important than paying unsecured creditors.
    Debt on 25/5/17
    Mortgage £61,999 £59,887
    Secured loan approximately £20,000 £19,353
    Unsecured debt in DMP with Stepchange £38,887 £37,763
    • iamugly
    • By iamugly 12th Jun 17, 8:45 AM
    • 7 Posts
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    iamugly
    • #5
    • 12th Jun 17, 8:45 AM
    • #5
    • 12th Jun 17, 8:45 AM
    As the house we currently live in is being sold then we dont have anywhere to live so we need that money to buy somewhere. As we have an arrangement through stepchange to pay our debts, will this be a problem?

    Son's partner has her own house and son lives with her so he doesnt have a mortgage.
    • chanz4
    • By chanz4 12th Jun 17, 9:42 AM
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    chanz4
    • #6
    • 12th Jun 17, 9:42 AM
    • #6
    • 12th Jun 17, 9:42 AM
    ask step change, the inherited cash should be going towards the debts. What if they ask for your bank statements on a review?
    Don't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.
    • Caz3121
    • By Caz3121 12th Jun 17, 9:46 AM
    • 10,465 Posts
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    Caz3121
    • #7
    • 12th Jun 17, 9:46 AM
    • #7
    • 12th Jun 17, 9:46 AM
    will you be planning on getting a mortgage with your son or is the plan to have it in his name?
    If the latter - for the inheritance/deposit, do you plan to lend it to him or gift it to him?
    as has been mentioned lenders are not keen on buy to lets where the property will be rented to family members
    Probably something he will need to sit down with a broker and find if this is an option
    • iamugly
    • By iamugly 12th Jun 17, 9:46 AM
    • 7 Posts
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    iamugly
    • #8
    • 12th Jun 17, 9:46 AM
    • #8
    • 12th Jun 17, 9:46 AM
    The problem with that is we will lose benefits and have no money to live on or buy a house with if we pay our debts.
    • Mojisola
    • By Mojisola 12th Jun 17, 9:50 AM
    • 27,598 Posts
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    Mojisola
    • #9
    • 12th Jun 17, 9:50 AM
    • #9
    • 12th Jun 17, 9:50 AM
    The problem with that is we will lose benefits and have no money to live on or buy a house with if we pay our debts.
    Originally posted by iamugly
    If you receive an inheritance and use the money to buy somewhere to live, you will not lose your benefits - this isn't classified as deliberate deprivation of capital.
    • iamugly
    • By iamugly 12th Jun 17, 10:09 AM
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    iamugly
    Yes thats why we want to buy.
    • Mojisola
    • By Mojisola 12th Jun 17, 10:20 AM
    • 27,598 Posts
    • 70,087 Thanks
    Mojisola
    Yes thats why we want to buy.
    Originally posted by iamugly
    The debts are another issue. If you owed me money and you received a lump sum, I'd want my money from you.
    • iamugly
    • By iamugly 12th Jun 17, 10:30 AM
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    iamugly
    But if we pay the debts we also lose the benefits because its classified as deliberate deprivation of capital so we'd end up with no home and no money to live on
    • Mojisola
    • By Mojisola 12th Jun 17, 10:33 AM
    • 27,598 Posts
    • 70,087 Thanks
    Mojisola
    But if we pay the debts we also lose the benefits because its classified as deliberate deprivation of capital so we'd end up with no home and no money to live on
    Originally posted by iamugly
    And what happens if you don't pay the debts?
    • iamugly
    • By iamugly 12th Jun 17, 10:37 AM
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    iamugly
    we are in an arrangement to pay so we do pay
    • aneary
    • By aneary 12th Jun 17, 10:46 AM
    • 155 Posts
    • 81 Thanks
    aneary
    Having a roof over you head is more of a priority than any other debt.

    Get some advice from a professional of the best way to arrange to buy the house with your son lending you the extra amount.

    It may be some sort of deed, BTL whatever it is speak to a solicitor it will be worth the fee to ensure everything is set out correctly from the start. I personally wouldn't go to a mortgage broker for legal advise although you may need one to secure a mortgage.
    • getmore4less
    • By getmore4less 12th Jun 17, 1:13 PM
    • 28,754 Posts
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    getmore4less
    Buy a cheaper place rather than the one you want.
    • iamugly
    • By iamugly 12th Jun 17, 1:22 PM
    • 7 Posts
    • 0 Thanks
    iamugly
    due to disability a house is out of the question, and bungalows cost more around here.
    The one we are looking at is around the lowest available
    • warby68
    • By warby68 12th Jun 17, 1:37 PM
    • 752 Posts
    • 8,431 Thanks
    warby68
    What about flats?

    Sorry, much as I understand and applaud your son's wish to help his mum and dad, he is potentially harming his own future in a number of ways. If his relationship ends or his partner wishes them to pool resources for a joint property and he can't move on because he has a mortgage on your behalf then it wouldn't be good for him or his relationship.

    If he was wealthier and could simply gift or lend without borrowing himself it might be different but it doesn't sound like he has much behind him either.

    Where did you live before you moved into dad's house? Is that type of accommodation no longer an option?

    I suspect you'd have to buy together in some way to pool your deposit and his mortgage raising ability but even that would be uncertain given the presumably low value of the mortgage (some lenders not interested) and you as the joint owners not being good credit risks.

    I think you might have to lower your sights to what you can afford on your own, even if that is rented.
    • getmore4less
    • By getmore4less 12th Jun 17, 2:11 PM
    • 28,754 Posts
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    getmore4less
    Bit of a catch22 which could have been simplified with some IHT planning.

    Can't get a mortgage, probably can't get a joint mortgage, can't gift it to son.

    What about the other 1/2 of the house you were living in can't they lend you the money.
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