How to help unemployed single mum onto the housing ladder?

clutton_2

many many thanks black saturn - that is most instructive, i have cut and pasted that for future reference - i suspect that some local housing benefits officers have used a bit of their own "discretion" when making decisions in the past.

black-saturn

clutton wrote:

many thanks black sabbath - that is most instructive, i have cut and pasted that for future reference - i suspect that some local housing benefits offices use a bit of their own "discretion" when making decisions in the past.

LOL black sabbath!!! I'm an Ozzy fan so that was a good typo :rotfl:

clutton_2

lol !!!!!! i noticed it and changed it - did not want to cause offence !!!

jakehamble

So is the general consensus then that paying the extra for a mortgage, leading to house ownership at the end of it, is not worth paying the extra compared to renting the equivalent property? I'm just afraid that another 5 years down the line it will be so completely impossible that I will kick myself for not finding some way to help her do it now.

black-saturn

Personally I think if you have the chance to own your own house or part of it it's always better than renting from someone else for a house which will never be yours.

brannyrhino_2

The only downside on this is what do you do if she links up with the man from hell (you know the type listens to heavy metal long hair hippie ossie type!) how will that affect the relationship/arrangement between the family in respect of deposits etc.

Doozergirl

black-saturn wrote:

A mortgage lender will be OK with a house let to family. It's just a buy to let mortgage like any other and you can pay housing benefit to a family member as long as they act like a proper legal landlord and they have a proper legal tenancy agreement.

I have BTL mortgages and have specifically had to sign to say that the property is not rented to a member of the family. A BTL is an investment venture and family are not likely to bring in the best returns, as the OP realises.

To the OP, I am in total agreement with greencat; I think you would really help the situation if you could find your sister a decent landlord. Lending the deposit and rent until HB comes through would really further the cause; you know that your little nieces and nephews are safe but it would be much les of a financial risk for you and your family.

You sound like a very nice sibling to have though, jakehamble

lisa_75

jakehamble wrote:

So is the general consensus then that paying the extra for a mortgage, leading to house ownership at the end of it, is not worth paying the extra compared to renting the equivalent property? I'm just afraid that another 5 years down the line it will be so completely impossible that I will kick myself for not finding some way to help her do it now.

What happens when she is back in work, maybe in 2 or 3 years time. How will she pay such a high rent if she does not get housing benefit?

No one knows what the housing market is going to do. The house may may worth less in 5 years time.

I don't see anything wrong with renting until you can afford to buy. Many of us are in the same boat and can't afford to buy unless there are 2 incomes coming into the house. In 5 years time she could have met a man and buy a house with him. Things change.

I think you will do best supporting her in her bid to get educated. That is the key to her having a better life. Whether she rents or buys makes no difference if she is on a low income and in poverty.

real1314

ok, first part, there's nothing to stop you renting to a relative, no need to rent to anyone else, but the key point is: what would you do if they didn't pay the rent / she couldn't pay the rent?

woudl you; 1. let her stay rent free? or 2. Have to kick her out and either get someone else in or sell it?

1 = no HB
2 = HB paid.

second part - viability:
a £120k mortgage (including the deposit part raised through re-mortgage on existing property) would cost about £800 per month on a 20 year mortgage.

You'd be £300 short a month x 12 months x 20 years = £72,000 !!!!

Are you going to bear that loss or are you going to take that from the future value of the property? In which case you might just scrape even, but YOU are taking all the risks on the mortgage payments and on property prices and then passing on the profit to your sister. Nice, but is that what you want?

Another option might be an interest only mortgage, costing around £560 per month for £120k but bear in mind that there are lots of other costs in renting out property - gas cert £50 per year, building insurance around £250-300 ish? Maintenance costs, etc etc, just £300 per year for gas and insurance adds another £25 per month to your costs, leaving you £85 a month down on an interest only deal.

PoorDave

Doozergirl wrote:

I have BTL mortgages and have specifically had to sign to say that the property is not rented to a member of the family. A BTL is an investment venture and family are not likely to bring in the best returns, as the OP realises.

To the OP, I am in total agreement with greencat; I think you would really help the situation if you could find your sister a decent landlord. Lending the deposit and rent until HB comes through would really further the cause; you know that your little nieces and nephews are safe but it would be much les of a financial risk for you and your family.

You sound like a very nice sibling to have though, jakehamble

While i don't want to disagree with your experience with your lender, at least one of the more trustworthy mortage brokers on MSE has posted elsewhere to say the "letting to family on a BTL mortgage" is not always impossible. Depends on individual lender, apparently.

Our outstanding mortgage is approx 135k, and that's costing us 800pcm on a reasonable fixed rate deal from 18 months ago, if these figure help at all