DSS -Selling and renting

dopester

I've given this some thought now + read over other bits and pieces you posted in this thread:
http://forums.moneysavingexpert.com/showthread.html?t=2394515

storeton wrote: »

sorry lazy daisy it is a bit ambiguous,
We want to buy house at reduced figure of £180000 because my parents have a intrest only mortgage of that amount due to be repaid in next 12 months and they have no saving vehicle in place to pay this.
They have tried recently tried to sell but have only had offers not worth considering seriously( real chancers) and this project would be a perfect solution,but try convincing the banks at this moment in the recession!
thanks
storeton

You obviously like your parents home else you wouldn't consider buying it (sort of from them, at £180K mortgage so you can all live there).

If I was thinking like a schemer, I'd suspect that your parents would have some time to fight off any repossession action if they couldn't stump up the £180K in 12 months time, with all the court papers you can file to delay reposession.

I'd be thinking that maybe you and your sister should keep saving up your money, weigh up what the impacts are of allowing it to be repossessed, your parents made bankrupt even (can they touch pensions?)... and then you and your sister come in with an offer to buy the house at £140K, or whatever it's given a market value at. Provided you can save deposit in the meantime and afford the mortgage.

Worse case after that, you'd still all have money to go rent a place suitable for your needs, with your parents having some income, and you and sis on pretty good money. I wouldn't get overly stressed about it. The problem is there, and you have to find a way of dealing with it sensibly.

I'm not sure it's too sensible for the son and daughter, who currently seem to have no legal obligation to the property (not on mortgage) to try finding £180K deposit/mortgage to help parents, locking themselves into a possibly difficult position... when offers coming in to buy the house at the moment are very low, and could fall further.

dopester

Or sell it now for what they market will offer.. if you really believe it's worth £250K.

Are the offers you're getting not above £180K? Enough to clear the mortgage? Sell then go rent a house between you.

Unless you are loathe to accept below what you think it's really worth (£250K) and that £70K of equity disappearing into nothing in your mind.

storeton

pingu
you do not know me and my family ,Ihave already stated I'm NOT INTERESTED IN YOUR OPINIONS.
If we earn the money legally,pay tax on it we can burn it if we want to
just give me some positive input

Fire_Fox

storeton wrote: »

I thought everyone had cards/loans of at least £30000 especially if they have been to university , the amount is still up to the indidual whatever he earns

The average new graduate debt is £17K of which the vast majority is owed to the student loans company, and thus not counted as a debt for mortgage purposes. Average household debt in the UK is only £9K excluding mortgages.

Jowo_2

Storeton,

You have taken on the responsibility for your parents poor financial decisions in remortgaging their property to pay for you and your sisters private education and subsequently not having any funds to pay it off.

It's great that you and your sister wish to repay your parents investment in you by preventing them from losing their property but its obviously causing you a lot of stress because you've been dragged into the consequences of their poor financial management.

Remember, it is not the fault of the DSS, HMRC, the lender or the posters on this forum that your parents have ended up in that precarious position. It's not even your responsibility to fix your parents problems, though you obviously want to take ownership of it.

Your choices are quite simply

1. Sell the property - its only worth what people will pay for it, there's no true value, just what the market allows. If it sells, your parents cannot deprive themselves of the capital to improve their ability to claim benefits. Look into how to better market the property and take advice how you can strengthen the sales position, whether its through switching estate agents, de-cluttering/decorating and contemplate now the last resort of putting it up for auction before the lenders repossesses it.

2. Buy the property - you and your sister are very risky applicants because of high debts and low income respectively. Only a specialist broker can help. If you buy it for less than its valuation, you need to understand the potential risks to your parents for means tested benefits under the deprivation of capital rules. As you intend to charge rent to your parents, you need to look into the tax and CGT implications of being their landlord and understand that close relatives cannot receive housing benefit when the landlord/tenant live together in the same property.

3. Accept that it's not your problem and there's little you can do to influence the outcome. Let your parents know that you are there for them in other ways that you can give support. Consider other ways you can assist them at less risk to yourself should the property be repossessed, such as lending them the deposit for a rental property or being a guarantor for them. They've put enormous responsibility back onto your shoulders but few parents expect their children to bail them out. The decision for them to put their property at risk by choosing to privately educate you when they could not afford to is not your fault to fix.

pingu2209

Aside from the comments I made earlier and the responses. There is a longer term issue in that it is likely in not too far future years for either you or your sister (or both) to get married and have children (not necessarily in that order).

What would happen to the living situation then?

Seriously, even if you could buy the house and all live together; alternatively, sell and rent somewhere where you all live together. It isn't a viable long term solution. What if your sister meets mister right in 2 years time and wants to marry and start a family. What if you meet miss right?

You may be embarking upon a solution that would become a problem in a few years time, leaving your parents in a worse situation than they are in now.

Running_Horse

Subscribes to thread.

storeton

thanks PINGU
All what you say is true about the future,but who knows what's round the corner health wise?so we are happy in the road we want to take.
More importantly who's got any money to lend on a stone cold certainty?

dopester

Jowo wrote: »

Your choices are quite simply

I pulled a 30 hour day. So many points in your post are what I was trying to cover - but you did it in a very clear logical format.

Facts are, the parents are 57 years old, and in the hole for a mortgage debt of £180,000 which is currently interest only. That £180,000 becomes due for repayment in 12 months time.

The house is worth whatever you can get from the market at any point in time. OP believes it's worth £250,000.

Son and daughter may be carrying their own debts. In theory student loans might not count as debt in mortgage according to Firefox - but those debts are very real. They are also not best placed to find a mortgage for £180,000 in this market, for this approach of saving the family home. Pingu2209's points are also very valid.

The son and daughter have jobs and income and options. My fear is they'd be stretching themselves to raise £180,000 to save their parents current position, and subsequently might be vulnerable themselves to any changes in circumstances, possibly bringing down Mum and Dad, son and daughter.

Anyway it's from Jowo's 3 choices imo, but if the OP is talking stone cold certainties I feel minds are very much locked on what the home was worth towards peak, rather than taking sensible options.

storeton

JA1000 wrote: »

Wait until you get your bonus and pay for it outright.

ah!!!!!!!!! of only I hadn't added an extra 0 to £16000