Keeping In the Family

splashin

Hope anyone can point me in the right direction or offer any advice regarding my situation.

My house, which I currently live in was left to me and my brother in 2003. I bought my brother out taking out a mortgage for 50% (£80k) of the value price. I have lived here ever since with my 13 year old son, but have never had a partner living with me.

I have recently found out I am now 4 months pregnant after 12 month relationship, which is now over. The baby is due in May 2009. I am currently in fulltime employment and have been since 2002 and plan to work upto as near as the birth as possible, after this I understand I should qualify for some type of maternity benefit which is around £100 per week + child tax credits + child benefit. This I think will continue for 6 months after the birth, then should I not return to work I should be able to get Income Support. I understand that benefits are not there to pay for things such as mortgages and this was never my intention when I purchased the property. I am currently getting just under £1000 per month from salary, ctc and chb. My monthly outgoings amount to £790 per month, I have no credit cards or loans, no overdraft, no hp, just my regular gas elec etc and my mortgage. When the baby is born my household income will reduce to £600 (estimate)per month. For me to keep paying my mortgage on this reduced income would mean taking the food from our mouths just to keep my head above water. If I had to do this then I would, as I have lived hand to mouth many times before, but this is no life for children to live.
Anyway to cut a long story short. I have spoken with my brother and he suggested, that I sell him the house back for the cost of settlement wanted by the mortgage company and then rent it from him. I would get some help from income support to pay my rent if I lived in a rented property, but what would be the implacations doing this.????
1. Will housing benefit allow for me to once have owned the property, sold it, then rent back, without moving?
2. With us being related would the housing benefit allow for me to rent off him?
I would really like to see the property/investment at least stay within the family even though I won't profit myself from the sale, rather than getting it repossed and then going on homeless waiting housing list with council. My brother would own the property and I would never have any proceeds due to me should it ever be sold on in the future.
Has anyone ever seen this scenario before, and if so, what are the facts i should be aware of? I am not in anyway trying to cheat the system as I am a very compliant and good person when it comes to things such as this, I dont believe anyone should get anything they are not entitled too, so please don't think of me in that way.

splashin

Conor_3

You've absolutely no chance in hell of this working at all. It's virtually impossible to get them to pay HB/LHA to a relative and 100% guaranteed that it'll not happen when you've sold the house to him for the sole reason of getting housing benefit.

I am not in anyway trying to cheat the system as I am a very compliant and good person when it comes to things such as this, I dont believe anyone should get anything they are not entitled too, so please don't think of me in that way.

Why not? That's exactly what you are doing. You are deliberately selling your house to your brother in order to claim housing benefit. There is no other way it can be viewed. The worst part is that you don't actually need to do anything at all other than sit back and enjoy being a mum.

You're 4 months pregnant and you've got a surplus of £200 a month. Put that in the bank and save it. It'll give you enough to top up your income from benefits for a year and long before that, Income Support Mortgage Interest payments would have started kicking in. Also remember you'll not have council tax to pay either so that'll knock around £100 a month off your outgoings.

However most of that advice is moot anyway because of the following which will be your income once maternity pay ends:

Income Support £60.50 a week.
Child Benefit £33 a week.
Child Tax Credit £106.92 a week (Annually it comprises of Family element £545 + baby addition until a year £545 old plus 2x child elements of £2235)

So monthly from the above you'd have £868 a month income. And don't forget you've no council tax to pay as well. Then 39 weeks after the start of your IS claim, you qualify for mortgage interest payments which will offset losing the £10 a week baby addition element once your newborn is 12 months old.

In short:
YOU WILL HAVE MORE THAN ENOUGH COMING IN SO ENJOY BEING PREGNANT AND STOP WORRYING ABOUT IT AND PLOTTING UP SCHEMES THAT WON'T WORK.

DaisyFlower

"I am not in anyway trying to cheat the system as I am a very compliant and good person when it comes to things such as this, I dont believe anyone should get anything they are not entitled too, so please don't think of me in that way."

Love that quote. You're attempting to try and get HB by defrauding the system and claim IS as having already decided you cant work with having a child on the way.

Why cant you continue to work and carry on with your mortgage. With wages, CTC/WTC, FA and 2 sets of child maintenance there is no reason to claim IS and expect your rent to be paid for you.

mouseymousey99

Understand you want to stay in your home - but I think Conor is right. My mortgage is paid by DWP but as its interest only; absolutely no chance of hanging on to it - which is breaking my heart! Just out of interest - why are you so set on not working again? I wish I could get back to work and sort this - and is the childs father able to help??

Conor_3

See breakdown above. She should have about £200 a month spare after her outgoings when her maternity pay ends even if she has to pay the mortgage. She's going to be fine. No need to conjour up all kinds of schemes at all.

barbie_babe

When my husband lost his job a few years back ,are mortgage company let us pay what we could afford for nine months. Then the DWP paid the intrest only which was still 50 pound short a month but mortgage company were ok with that. When he got a new job, however we did have to pay arrears off but they lets us pay 50 pounds extra a month so we didnt get behind with normaal payments. So my advice would be talk to the company you have your mortgage with.

Kimitatsu

Hi splashin

The Local Housing Allowance rules as they are now (replacing Housing Benefit) specify that you cannot rent from an immediate member of your family (mother/father/brother/sister/aunt/uncle etc). If you sold the house to him you may also leave yourself open to deprivation of assets rules.

Why dont you convert your mortgage to an interest only mortgage until you feel able to go back to work? This will reduce your payments and after 39 weeks you will qualify for payments for the amount up to the first £100,000.

You can then move it back to a capital repayment mortgage at a later date if/when you return to work.

HTH

[Deleted User]

Kimitatsu wrote: »

Hi splashin

The Local Housing Allowance rules as they are now (replacing Housing Benefit) specify that you cannot rent from an immediate member of your family (mother/father/brother/sister/aunt/uncle etc). If you sold the house to him you may also leave yourself open to deprivation of assets rules.

Why dont you convert your mortgage to an interest only mortgage until you feel able to go back to work? This will reduce your payments and after 39 weeks you will qualify for payments for the amount up to the first £100,000.

You can then move it back to a capital repayment mortgage at a later date if/when you return to work.

HTH

From jan.1st 2009 it will be £200,000 and only 13 weeks waiting period,they have also frozen for 6 months the interest rate the dwp apply at 6.08%,it was due to fall to 4.58% from sometime in december

Conor_3

Is the 13 week rule being applied to existing claimants?

dmg24

Conor wrote: »

Is the 13 week rule being applied to existing claimants?

Yes. .

scooby1001

I personally think that people are being too harsh on the op. For goodness sake she has been holding down a job, single parent and bought her own home. Now that she is in a stress about what will happen when she has her baby and looking at the options she is treated like someone trying to fiddle the system. Give her a break. Geeze.

To the op you won't be able to sell it back as others have pointed out cos of the reasons already stated BUT if you wanted to stay at home for a year or two with the new baby you can claim IS and after a short while get the mortgage interest paid which at the generous rate they use you should be able to keep the house. Do what is best for you and your child don't take on board the negative comments on here.

I hate women who keep on churing out kids while on IS and not having a live in partener BUT THIS OP IS NOT ONE OF THEM. Give her a break