DSS -Selling and renting

storeton

This question is a bit complicated so I have put it in this section?
I am on benefits from the DSS.
My wife and I have a joint mortgage which the DSS give no help on
We have the opportunity of renting another house with possible help from DSS,but,
If we sell house the equity left would be above the savings limit for DSS help,but my son has got himself into a lot of debt with horrendous interest rates,I could pay his debts off with my equity but would this be considered only as a gift? and the limit is I believe only £3000 p.a.
Or if I rented my old home ,I know that the rental income would be counted as unearned income by DSS but would the property be counted as an asset/investment?
thanks for any advice Storeton

seabright

I think you'd be considered by the DSS to be riding yourself of your assets in order to qualify for benefits if you gave the money to your son, so you wouldn't get help.

If you don't live in the house any more it would be considered an asset, also you'd have to pay Capital Gains Tax when you sold it.

If you can afford the mortgage it seems better to stay put and get you son over to the Debt Free Wanabee Board!

storeton

renting my property is too comlicated.so i'm selling.
One question though,gift allowances to children is it still £3000 per child/per annum tax free as they might as well have some inheritance while we are fit and able to see them waste it!!and less for the taxman.
Storeton

getmore4less

storeton wrote: »

renting my property is too comlicated.so i'm selling.
One question though,gift allowances to children is it still £3000 per child/per annum tax free as they might as well have some inheritance while we are fit and able to see them waste it!!and less for the taxman.
Storeton

You can give away more but it becomes a potential inheritance tax issue.

Looks like you won't have that(you need a lot of money).

Jowo_2

Google 'deprivation of capital' to understand why your proposed action carries the risk that the authorities will still count it, even if you get rid of it. Get expert advice from Shelter.

You say you don't get help with your mortgage - is this because your savings are too high, for example, so you don't qualify, or because you haven't applied? Have a look at the Shelter website which has a section for homeowners struggling with their mortgages as it lists all the available schemes, including one where it is bought by a social landlord and the owners can then continue to live in the property as tenants.

storeton

Right lets start again and scrub inital question, as property parents wanted to rent has gone,renting thier house out is definately off the menu ,and putting the house on the market in these times only seems to bring out the dreamers,weekend tourists or chancers they have found to their costs(HOMEPACS £400 to tell you your lofts lagged and your boiler works)
Leaving out any issues with HMGC for now,as a forced sale would be a bigger financial disaster
So family decision for me and my sister to apply for mortgage to buy parents property for all of us to live in and so paying off parents mortgage(they did not take out any savings vehicle) Had mortgagees TOPAZ SECURITIES allowed an extension we could have easily paid that for my parents but TOPAZ are not intrested,(they ended up with original mortgage from GMAC)
Parents only have small income and are 57 years old
I have income of £32500 +performance bonus of £160000 Iam 31 years old
I have a loan and cards of £30000 (not as bad as father thinks)
sister 24 years old has earnings of £12000 we are permantly employed
Natwest our bank say not enough earnings for £180000 needed to pay intrest only parents mortgage off ,even though house valued at £250000,using a standard remortgage even though we would be 1st time buyers and not a buy to let
As for banks security ,the issue of parents living under same roof as tenants was never an issue with them and they wanted to put my mother on the deeds .
Question is ,if and when are the banks/building societies going to lend again if ever?how much more security do they need?
The next stage will have to be a BROKER if we(son&daughter) can find one worth their fees?
This one could run&run but their is a clock ticking away,so I hope not to sound too confusing and paranoid!
Hope this has put the record straight?
What to do ?
storeton-father-son-&daughter&mum to

Fire_Fox

Son of Storeton: do you and your sister have a 10% deposit, £25K net (i.e. after your £30K debts have been paid)? You cannot technically swap names on a mortgage, you will have to buy the property from your parents. Topax will have to be paid in full and the legal fees then your parents get what money remains, if any, and the names on the deeds will have to change. Separately you will have to raise a deposit and mortgage for the value of the property. Not sure if you are suggesting your parents gift all the equity to you in lieu of a deposit??

We are not saying this is a tax or benefit scam, we think you need to look past the point that the property is sold to you. Your father will then have NO means-tested income as he will have gifted assets to you ('deprivation of capital'). He is unlikely to be able to pay you rent as you will all be one household and the DWP will not usually pay rent to family unless it can be proven that it is a 'commercial tenancy'. How is your father intending on living with no income?

So you and your sister will be paying the mortgage alone as well as paying your £30K debts. In which case why go to all the hassle of buying the house, why not help your parents out and pay the mortgage now? I don't understand why your parents are not getting any help with the mortgage interest from the DWP - is it because you and your sister live at home or because you mum is earning? If so why can't the four of you manage the mortgage?

Annisele

Ok, I think I understand what the situation is now.

As Fire Fox says, I think it depends on the deposit Son and Daughter of Storeton have. If they have £55k savings (i.e. 10% of house value plus £30k to repay the debts) then life will be much easier than if they don't.

Why would it be such a catastrophe if the house was sold? If it isn't selling at £250k that might suggest it's not worth £250k - but even so there's probably some equity there. Would Storeton and wife be able to rent?

Where are Son and Daughter of Storeton living now? If not in Storeton's house - will there definitely be space for all of you? There was some suggestion of getting an extension built; is the plan for all of you to live there dependant on getting funding for an extension?

storeton

As for the DSS side they would pay only the 1st £24000 (the original mortgage) as the £180000 was a remortgage .
We can scrape together £20k
House is plenty big enough for 4 adults
To sell ,apart from finding a buyer with max LDV around 75% they would need a deposit of over £60k and then they have to find a lender! both a rare breed in these times hence the chancers remark earlier(the property is up for sale ,scores around but no sensible offer) , the cost of renting anything not in "Dodge City" is double their mortgage as few under £1000 a month even in Merseyside are hardly worth a look,dad says rather live in tent in local woods
It's not a case of not paying the mortgage,even if DSS helped it's the time limit left with Topaz and if Natwest were going to put my mothers name on deeds that would be gifting only my fathers beneficial intrest?
Need that mortgage and soon,surely someone out their considering all the equity?
thanks
storeton

Jowo_2

If I've read this correctly, you have debts of 30k which is almost as high as your basic salary?

clutton_2

you seem reluctant to pay a broker.. this is the only way you can get expert advice and many dont charge till the mortgage is actually processed... go to a whole market broker if possible.. they dont all charge a lot