take over mortgage and convert house into flats...?

nipper76

hiya.

I'm looking for some help / ideas on a idea i had that's way out of my league.

My dad has a mortgage that he has owned since i was born, he owes £25k ish (it cost £19k 27 years ago) and is never going to be able to repay it now. he only pays about £110pcm towards it.

I'm not a high earner BUT i could afford the £110pcm.

Would he be able to sign the house and debt over to me..? because i had an idea to fix the place up which it really needs...

i thought ( and this is where ill need to be corrected ) that if he signed the place over to me, i could ship him to his dads for a bit, take out some money on the house and convert it into 2 flats.
i would need to build up a a tiny extension on the back of the house to maximize room inside.
then once completed, he could have the downstairs due to his health (could housing benefit pay the rent on that flat?) and the upstairs could be rented out

could that work..?

and how would that possibly affect me..? i live with my partner and kids, and because im on a low income i receive help with rent on a housing association property.

im sounds easy when you say it, but im sure its not going to be that straight forward...??

many thanks

angelsmomma

You won't be able to claim rent on your HA house if you own another property.

I don't think your dad can claim housing benefit if you own the property. Not sure of the rule but someone with more knowledge will be along soon.

How would you pay for the conversion to the property, would you be expecting to get a mortgage as on a low income that might be difficult. It would have to be a buy to let mortgage if you are planning to let it out which has a higher interest rate.

nipper76

i was just assuming they would allow me to take some money out on the house, being as its worth about £150k ...??

JQ.

They work out how much you can borrow based on your income. Under normal circumstances you can generally borrow 3.5 times your annual wage.

PasturesNew

a] It doesn't work like that
b] It's doomed

You'd have to raise a mortgage for the £27k, to pay off his mortgage, then own the house.
Then you'd need Planning Permission and £30-50k for the conversion even if you got Planning Permission.
Your dad's rent wouldn't be paid as they'd make an assumption he's got £150k in his bank (see deprivation of assets) -and- it'd look like a 'contrived tenancy'
Your income/benefits would assume you've got an income coming in from the house, or could live in the house yourself, so your claim would probably be overhauled/withdrawn

And that's just the start of it

poppysarah

Why don't you move in with him? Get added to the mortgage and then help him buy the house.

scottishblondie

PasturesNew has summed it up pretty succinctly, I'll second what she said. Your Dad can't give away his house without harming his future, and you simply can't afford to carry out this plan.

It would be better for your Dad just to sell the house and downsize. If he can get a suitable property that costs <£120k then he can live rent and mortgage free for the rest of his life.