1st time buyer, from family !!

Neil-up-Down

Help !! Can anybody advise on the following ?? My son & his partner live in a house owned by her mother, they pay monthly rent (£320). They have been given the chance to buy the house for market value less 1/3rd (as there are 3 children the mother has knocked off the third inheritance) this works out at approx £70,000 to buy the house. What they want to know is there a way to buy the house from mother without going to a bank, building soc. i.e. mother sells house over 20 years at £ 300 per month. ??
And if they sell in the future the balance owed gets paid to mother - just like repaying a mortgage. ??
I know it sounds simple but it probably isnt. !! Any help would be very much appreciated

Munki_2

I'm sure there must be a way that some sort of agreement can be arranged through a solicitor. Try to find a solicitor that offers a free consultation and explain your idea to them. I would guess it shouldn't take a good solicitor very long to tell you if it's possible and what the pitfalls would be (i.e what would also need to be changed in peoples wills).

I doubt it will be too long before someone will some real knowledge of this sort of thing replies! ;-)

Munki.

simonjfisher

Why do they not want to go to a bank or building society?

lisyloo

What they want to know is there a way to buy the house from mother without going to a bank, building soc. i.e. mother sells house over 20 years at £ 300 per month. ??

You are right it isn't simple. There are many complications.

The % of ownership would not be documented as you go along, so there could be problems if any party dies or needs care.
What if the mother goes into long term care and the house is used to pay for care costs?
The son & partner could lose the whole lot.

It probably possible but I suspect quite complicated.
You have to cover - long term care, divorce, falling out, any party dying etc.
It would take quite a lot of effort to cover all the pitfalls but I think it can be done if you really think this is the best approach.

Expect to pay some reasonably high legal bills for wills, contracts etc.

mountainofdebt

...her and my uncle (by marriage) 'bought' my grandmother's house by this method.

However things started to get very messy when my Aunt and Uncle split up especially as the house had been trasnferred into their names. As I was much younger in those days I don't really know the ins and outs of the problems but I know it also caused alot of agro between the siblings as well.

Neil-up-Down

simonjfisher wrote:

Why do they not want to go to a bank or building society?

Why give thr bank & B.S. money- profit, when all the debt and borrowings can be kept within the family.
The plan, I think is to keep the house 2 years, fully refurbish it, and then sell it for a profit. the outstanding amount would then be paid back and they would have a bigger deposit for the next house.

lisyloo

Why give thr bank & B.S. money- profit, when all the debt and borrowings can be kept within the family.

Two reasons I can think of.

1) Possible income tax liability.
2) Whilst banks make a profit, they also take risks e.g. bad debt. Will your mother be making provision for the risks?