Should I take over my mothers house?

Kitten_Pie

Hi All,

Just looking for others opinions.

Background
My mother is living in a large 5 bed house with herself and my younger sister. The mortgage left is quite small and manageable (£60,000) however the bills are crippling her each month. I have advised her to sell the house as she should get £350,000 for it possibly a lot more. This would enable her to pay off her mortgage and credit card (which isn't a huge amount in the scheme of things but is rising per month) and buy a smaller house/bungalow outright which would give her smaller bills no mortgage and some savings.
My mother is reluctant to do that as she loves the house which has been the family house all our lives and reminds her of my late father.

My Situation
My husband and I have a small flat in London and are currently looking to move back to where my mother is and get a larger house where we can start a family and have a better home life nearer family.
I brought up the thought of moving back to my mothers short term to help with the bills etc however we have never got along while living together especially with my youngest sister.- We have kept it as a last resort if need be but would prefer not to.

Offer
My Mother has suggested that we buy a small house/bungalow near where she lives which she can then move into and we would take on her house. This would be affordable however i can't see how it could help. My initial reaction is to say no but i promised her i would look into it and consider the possibility.



Pros

• We would get a larger house in an area we both know which we wouldn't be able to afford otherwise
• My mother would get a smaller house nearby with smaller more affordable bills.
• The house would stay in the family.
• The house for my Mother would be smaller than we would buy so we would have savings to do the place up.

Cons

• My mother would not have the saving she would have if she sold the house.
• At some point my mother would need to sell the house and we would loose our home
• There is alot of work to be done.
• We would never feel that it was actually our house.

Sorry for the long post, I just don't want to say no to my mother without actually thinking about it.

puddy

im not sure what you mean by 'taking the house over'. if you mean your mum would sign the house over to you, she can only do this if the mortgage is paid off, so you would need to pay off that mortgage as well as buying her a smaller place

in addition, if you didnt actually buy the place, i feel there would be deprivation of capital issues for your mum should she need to claim benefits, or have care later in life, plus cgt for you because you are aquiring an expensive asset which you havent paid the full price for, or it would be inheritance tax, im not sure

she really needs to be persuaded of the idea to get rid of the house, utilise the equity etc. the older she gets the less likely she will feel like moving out of the home and she wont be able to run it efficiently as she gets older, it will go to rack and ruin (which by the soounds of it, its on its way),, how does she feel this is a fitting memory of your father/her husband, surely he would want her to live in comfort and be financially well off?

yes it will take hertime to come round to the idea of moving because she clearly is emotionally attached to the home (as we all are), but life moves on, her children have moved on and it sounds like she is living in the past

BitterAndTwisted

So, both parties would be occupying properties which neither owns? What would happen if you buy a property, your mother moves in, refuses to move out and then decides to sell the family home?

it sounds like a crackpot scheme to me with altogether too many possible complications and potential reasons for disagreement.

Sounds to me like the family home needs to be sold however unattractive an idea that is for your mother.

Cannon_Fodder

A bit confused that the mortgage is manageable but the bills are crippling.

You might as easily say the bills are fine, but the mortgage is crippling.

The problem, I'm guessing, is that her income doesn't cover both.

Depends on the price of a smaller place. You could buy her place for £300k say. i.e. get a £50k 'family discount' - check for deprivation of asset rules on what proportion might be safe.

She then gets something smaller for £180k, clears her £60k mortgage, and banks £60k to supplement her pension.

But with £10k in debts in your signature, I'm guessing you don't have a deposit - so which ever way round you did things, it would likely be a non-starter...

hermum

Is it a property that could be divided into 2 flats & make for liveable space for each? If so would that be a possibility, I'm sure there will be lots of reasons why this can't be done but just my initial thought.

Jowo_2

hermum wrote: »

Is it a property that could be divided into 2 flats & make for liveable space for each? If so would that be a possibility, I'm sure there will be lots of reasons why this can't be done but just my initial thought.

Some areas have restrictions on the conversion of houses into flats but this can easily be checked out.

ih8stress

As others have said, the sensible option is to sell the family home, less complicated all round.

Also you don't mention how it will affect your sister, either now or in the future. Ie. is she still dependent on your mother? If you 'bought' the family home (or substitute) for a far lower price would you be giving your sister 50% of the difference for her possible 'inheritance loss'. Sounds like an emotional minefield all round, even if everyone is agreeable.

Re: the credit card. Would your mother not be better trying to pay this off asap (I can hear Martin sighing:money:)

Jowo_2

You say you have a poor relationship with your mother and/or sister. Though there are emotional attachments to this property, do you think that part of this suggestion is to do with controlling or having influence over you? That mixing family and business isn't going to work because its likely to lead to 'territorial' and inheritance type disputes, or general interference in the changes that you may want to make to 'their' house to make it more comfortable for your family?

How does your sister feel about this arrangement? Is she likely to sabotage it through envy? Where will she live - with you or your mum?

Is it pretty much win-win for them as they get a shiny new affordable place and you get lumbered with an old place that requires extensive repair and modernisation? Would they be able to let go of the original house or will they still see it as theirs and visit it too frequently and interfere with your plans to update it?

Has your mother considered taking in a lodger or foreign language students to supplement her income? Is your sister working and contributing to the bills? Have you looked into local council grants for homeowners to see if there are any schemes available that would fund some of this (for instance, there are age or benefit related grants for the upgrade/installation of central heating and there should be a link on the council website or MSE about this).

How old is your mum, is the mortgage a repayment or interest only one and when is it due to be paid off? There was a thread on here a few months back by a son whose parents house was due to be repossessed by the lender upon the expiry of the mortgage term - he found out it was interest only for many years and they simply do not have the income to get a new mortgage, nor pay off the balance in time.

sonastin

hermum wrote: »

Is it a property that could be divided into 2 flats & make for liveable space for each? If so would that be a possibility, I'm sure there will be lots of reasons why this can't be done but just my initial thought.

Even if you don't do a proper conversion, can you divide up the rooms to make "your" living space and "their" living space - e.g. turn one of the bedrooms into you living room, separate bathrooms etc?

It would give you chance to save up for something bigger while at the same time helping your mum out if you're sharing the bills.

I'm not sure I understand where the money will come from, where it will go to and who will end up owning what in your description of your mum's scenario.

As an alternative (if this isn't what your mum is suggesting) can you buy her house off her at the price of a smaller place so that she can move to the smaller place, and then pay her back the discount over time (i.e. the difference between market value and what you pay for the house is like a loan from your mum). Not sure of legal/tax implications but your loan repayments would boost her income to help her get her finances back on track...

Kitten_Pie

Thank you all for you suggestions and opinions. It is pretty much what we were thinking, seems there are so many reasons it won't work and not many benefits if any.

Unfortunately the house couldn't be turned into flats however we have previously thought about moving in and taking over a couple of rooms for our living space which is still an option but not sure how it would work. We do get on with my family however as I'm sure you'll appreciate when you move back under your parents house things change. Short term is fine but for a long length of time could get tricky.

Wouldn't be able to buy the place as we couldn't afford it our top price for a house is £250K and wouldn't be fair on my sisters or mother if she sold it to us.

My sister 20 would remain living with my mother for the time being but she doesn't contribute and has cause many rows over that and keeping all the lights in the house on etc.

Think it will be a no but thank you all for making my decision easier.