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    • charlesworth82
    • By charlesworth82 15th Jun 17, 11:06 AM
    • 303Posts
    • 65Thanks
    charlesworth82
    Council House Purchase - help
    • #1
    • 15th Jun 17, 11:06 AM
    Council House Purchase - help 15th Jun 17 at 11:06 AM
    Hi, I'm hoping someone can advise on if this is possible:

    My mum has lived in her council house her entire life. she's now decided she would like to purchase it.

    She only works part time so she's doubtful with her age and income that she won't be able to get a mortgage. She has been told she can put someone else on with her.

    She has asked myself. My issue is I already own a house. Would this be classed as a second house and all the fees and costs associated with that?
    ‘It ain’t over 'til it's over’
Page 3
    • Pricivius
    • By Pricivius 15th Jun 17, 1:57 PM
    • 576 Posts
    • 960 Thanks
    Pricivius
    In addition to the points raised above concerning what would happen if you lost your job, got sick or died, there's also the issue of divorce. Your share of the property would be an asset of the marriage and your wife/husband would be entitled to their share.

    With so much uncertainty financially, model the repayments on an interest rate at 7% or higher and see how that looks.

    A few things to ponder:

    Are you going to hold the property as tenants in common or joint tenants? If tic, you need to have a think about mum's will, as well as your own, to figure out what shares you each own and where it would go on either your or her death.

    If you're paying maintenance costs for mum, does this impact on the share of the property you own?

    If the neighbour starts an expensive boundary dispute, will you pay or mum?

    You may be at a disadvantage in years to come when you try to re-mortgage your own property because of your obligations to mum's mortgage - is this okay?

    If mum moves a partner in to the house who devalues it with his DIY or redecoration efforts, what will you do?

    Check the rules on selling within 5 years of purchase, just in case mum changes her mind, moves in with a partner or passes away - would you have an obligation to make up the shortfall if mum doesn't?
    • Conrad
    • By Conrad 15th Jun 17, 2:01 PM
    • 31,536 Posts
    • 54,995 Thanks
    Conrad
    Quite a bit or high moral grandstanding on here. I've been in fianace all my working life and let me tell you something OP, ignore this moral berating, I can guarantee you posters will make the most of opportunities their own life gifts them, such as for example benefiting from the luck of having middle class parents that did all they could to further their child's life chances, or making the most of inheritance and ISA tax free limits.


    As to morals on council house depletion;


    You will find plenty of people have 'immoral' pensions if we want to go down the competitive compassion grandstanding route. Who do you thinks makes the profits that feed these pension funds? Workers.


    So pensions are taking away money that could have gone in wages to workers, you know the wages of those workers the left pretend to care about so much. The same applies to equity ISA's.


    Virtue signallers love to blame nasty corporations for not paying enough tax, what they don't reveal is their pension and ISA's own these very companies that maximise profits for the benefits of shareholders (ISA and pension investors)


    Whilst the OP is getting his own hands dirty, virtue signallers let pension fund managers do their dirty work, and turn a blind eye
    Last edited by Conrad; 15-06-2017 at 2:13 PM.
    Will European citizens take kindly to bloated Brussels elites harming their livelihoods with barriers to their UK trade? 9% of Dutch exports come to the UK....
    • charlesworth82
    • By charlesworth82 15th Jun 17, 2:03 PM
    • 303 Posts
    • 65 Thanks
    charlesworth82
    In addition to the points raised above concerning what would happen if you lost your job, got sick or died, there's also the issue of divorce. Your share of the property would be an asset of the marriage and your wife/husband would be entitled to their share.

    With so much uncertainty financially, model the repayments on an interest rate at 7% or higher and see how that looks.

    A few things to ponder:

    Are you going to hold the property as tenants in common or joint tenants? If tic, you need to have a think about mum's will, as well as your own, to figure out what shares you each own and where it would go on either your or her death.

    If you're paying maintenance costs for mum, does this impact on the share of the property you own?

    If the neighbour starts an expensive boundary dispute, will you pay or mum?

    You may be at a disadvantage in years to come when you try to re-mortgage your own property because of your obligations to mum's mortgage - is this okay?

    If mum moves a partner in to the house who devalues it with his DIY or redecoration efforts, what will you do?

    Check the rules on selling within 5 years of purchase, just in case mum changes her mind, moves in with a partner or passes away - would you have an obligation to make up the shortfall if mum doesn't?
    Originally posted by Pricivius
    Thanks for all this - some good things to think over. The remortgage thing is one thing I've been looking into as it could definitely affect my own negatively plus if it has all the fees etc. it wouldnt be worth it for me to be on it.

    If i died she could buy out it outright (don't tell her)
    ‘It ain’t over 'til it's over’
    • Red-Squirrel
    • By Red-Squirrel 15th Jun 17, 2:39 PM
    • 1,614 Posts
    • 4,309 Thanks
    Red-Squirrel
    My mother will 100% live with me when she is unable to live alone - although we're both hoping this is a long way off
    Originally posted by charlesworth82
    You might have the best intentions with that now, but what if her needs are beyond your ability? What if you become unwell yourself? What if you die before her?
    • Red-Squirrel
    • By Red-Squirrel 15th Jun 17, 2:41 PM
    • 1,614 Posts
    • 4,309 Thanks
    Red-Squirrel
    I can guarantee you posters will make the most of opportunities their own life gifts them,
    Originally posted by Conrad
    We are advising that the OP's mother should continue to make the most of the fantastic opportunity she benefitted from many years ago, the secure council house she is incredibly lucky to have and should not throw away.
    • BrassicWoman
    • By BrassicWoman 15th Jun 17, 3:00 PM
    • 1,298 Posts
    • 5,403 Thanks
    BrassicWoman
    If your mum needs an adapted house in the future, if she owns her own, you're stuffed; in a council property they will try and find her somewhere more suitable.

    Does her house have stairlift, wheelchair wide doorways, and easily adapted downstairs bathroom, ramp access to the front door?
    Downsized and mortgage free
    September 17 grocery challenge £64.28/£100
    • Cheeky_Monkey
    • By Cheeky_Monkey 15th Jun 17, 6:19 PM
    • 1,298 Posts
    • 2,470 Thanks
    Cheeky_Monkey
    OP - you (and all the others like you) can dress it up as much as you like, you can even put a pretty little pink bow on top but, at the end of the day, despite your protestations, I'd bet that your motivation is to ultimately make a huge profit on selling the house after 5 years bearing in mind you will only have paid 40% of its value.

    You will of course get some posters who will agree wholeheartedly with what you want to do but then, that's probably because they've done it themselves to their parents.
    • christabell
    • By christabell 15th Jun 17, 7:06 PM
    • 417 Posts
    • 2,522 Thanks
    christabell
    Lordy Lordy, I can't believe some of the comments written on this post.

    Sir, why don't you ( or your Mum) get all the details from you/r Mums Council, and read through it.

    Then decide on a Repayment or Interest Only Mortgage, Whether you get a Tracker, Fixed or Whatever Rate the mortgage MAY Be, not forgetting Interest Rates Can GO UP...
    Is your mum needing Life Insurance?
    Will your Mum have to pay Council Tax or the discounted portion of Council Tax or not
    When you have crunched the numbers...decide together .

    I wish you the best of luck
    Today, my BEST is good enough.
    • Cakeguts
    • By Cakeguts 15th Jun 17, 7:49 PM
    • 2,720 Posts
    • 3,718 Thanks
    Cakeguts
    I am just going to add something here. You say that if your mum can't manage at home she can live with you. I hope your home is adapted for a disabled person with hoists to get someone out of bed and showers that take a wheelchair. The point at which someone can no longer manage at home is usually at the point where they become disabled. I don't know how old you are or how old your mum is but most children these days are also old when their parents become disabled so you have the possibility of a retired person looking after another retired person.

    Some people get illnesses that need 24 hour care so I hope you will be able to manage that? If she gets something like my mother you will need 24 hour care, the house adapted for a wheelchair and the ability to feed her through a tube. So thinking that she can automatically live with you isn't good in terms of foward planning. If she needs to have nursing care her home may have to be sold to pay for it.

    What your mother has at the moment is something that lots of people would like. She has the right to live in her house for the rest of her life. This will happen if she looses her job and if you loose your job. Secure tenancies are the only form of tenure that has this. Anyone else can loose their home. People with mortgages can get repossessed if they can't pay the mortgage and private tenants can be evicted. What your mum will give up if she buys her house is the best housing situation that anyone can have. This is worth more than money because once it is gone it is gone forever she can never get it back. There are no benefits that pay a mortgage. There are no benefits that help with house maintenance or insurance. If you own a house you pay for everything.

    Lots of people make the mistake that owning a house is cheaper than paying rent. It usually isn't. This is because a home owner is responsible for all repairs and lots of small things like a toilet flush not working, boiler services, leaking taps, new windows when the double glazing blows etc can all add up. So your mum will need to understand that she will need to have a lot in savings to pay for things breaking. The plumber who has come as an emergency to mend a leaking pipe needs to be paid straight away they won't wait until your mother saves up some money. If she puts away in savings the money that she would be now paying in rent that should be enough to cover building insurance and repairs that she will have to pay for as a home owner. Of course this won't save her any money she will still not be able to use that £350 per month because that will go towards any repairs needed.

    I don't think she will save any money doing this. I actually think there is a good chance it will cost her more money and she will lose her security. I hope she really understands this.
    • TedC
    • By TedC 20th Jun 17, 2:00 PM
    • 11 Posts
    • 25 Thanks
    TedC
    You can borrow the money privately if you have have to, it will always be in your Mothers best interests to buy, the Socialist representations that are showing through these posts are mindless. If someone has paid rent for 40 years they deserve their own cashback allowed by the RTB ... it is the Law until it is changed by Parliament ..
    • Pixie5740
    • By Pixie5740 20th Jun 17, 3:57 PM
    • 10,816 Posts
    • 14,943 Thanks
    Pixie5740
    You can borrow the money privately if you have have to, it will always be in your Mothers best interests to buy, the Socialist representations that are showing through these posts are mindless. If someone has paid rent for 40 years they deserve their own cashback allowed by the RTB ... it is the Law until it is changed by Parliament ..
    Originally posted by TedC
    That's simply not true. For some it is better to continue to remain a social tenant than buy.

    I try to adopt a "don't hate the player hate the game" stance when it comes to RTB but by your logic doesn't every private tenant deserve some cashback too? Perhaps a slice of any capital gains when the landlord eventually sells or dies?
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • FBaby
    • By FBaby 20th Jun 17, 4:27 PM
    • 15,783 Posts
    • 39,451 Thanks
    FBaby
    ooo yeah lets split this 30k profit between the 4 kids .....
    So is the house only worth about £25K now, with the expectation that value won't go up more than £5K in 7 years?

    Otherwise I don't get how you would only get £30k profit when you say that the mortgage will be paid for in 7 years.
    • da_rule
    • By da_rule 20th Jun 17, 6:03 PM
    • 2,491 Posts
    • 2,215 Thanks
    da_rule
    Not sure that the OP will come back to this, but I have serious reservations about his ability to get added to the transfer as a non-occupier. Whilst it is true that a non-tenant can be added, they must have resided in the property for at least a year.
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