Grandmother left me her house...£240,000 inheritance

Foxdime

I'm new too this and wanted to know if there is any other ideas advice.

I owned it outright. Exchange is to go through within the next month then the completion.

Where do I begin with the money?

Im 26, single mother to 2young children. I'm currently on benefits.

I'm not Eligable for a mortgage, and first and foremost will pay off my debts which amount to 2k and I have a debt relief order in place which needed April this year.

Someone has said buy a place outright for me and the children. Then once my credit rating picks up maybe sale it and get a small morgage?

I don't want to eat away at the money, I would want something in place so that I can move forward with my life and make positives steps to build a career for myself and be self sufficient so that i can provide for me and my daughters.

cashbackproblems

If you sell it will have an impact on your benefits as assets do not count but cash does, plus soon as you sell and start spending you will struggle to get back on the ladder especially with rates increasing. Keeping it seems obvious

Personally I would rent the property and the extra cash which could amount to anything from £500-1500 p/m (depending on LOCATION, south east it would be at higher end) and use this cash to clear debt/save. This would probably effect your benefits so you can transfer the property in your daughters name to get around it. Im sure you will get dogooders saying this is wrong but thats life

opinions4u

Why even think about mortgages? You have enough capital not to need one.

Perhaps buy a property with part of the money. Consider keeping a fair bit back though as, with no earned income, you need to be able to maintain it, pay council tax and other bills.

Unstandand the impact on means tested benefits too before you make a decision.

Dunroamin

cashbackproblems wrote: »

If you sell it will have an impact on your benefits as assets do not count but cash does, plus soon as you sell and start spending you will struggle to get back on the ladder especially with rates increasing. Keeping it seems obvious

Personally I would rent the property and the extra cash which could amount to anything from £500-1500 p/m (depending on LOCATION, south east it would be at higher end) and use this cash to clear debt/save. This would probably effect your benefits so you can transfer the property in your daughters name to get around it. Im sure you will get dogooders saying this is wrong but thats life

Obviously someone who's never heard of deprivation of capital!

innovate

cashbackproblems wrote: »

This would probably effect your benefits so you can transfer the property in your daughters name to get around it. Im sure you will get dogooders saying this is wrong but thats life

How utterly irresponsible to suggest deprivation of assets!

Hooloovoo

Foxdime wrote: »

Someone has said buy a place outright for me and the children.

Good idea. With no rent or mortgage to pay your financial life will be considerably easier.

Then once my credit rating picks up maybe sale it and get a small morgage?

Why? What is the thinking behind this? There must be some reasoning that I'm not seeing because as written it makes no sense at all.

In fact I'm not at all sure why you have sold the house in the first place. Wouldn't it have been easier to just move in? Although I can understand why you may not want to do that.

CLAPTON

cashbackproblems wrote: »

If you sell it will have an impact on your benefits as assets do not count but cash does, plus soon as you sell and start spending you will struggle to get back on the ladder especially with rates increasing. Keeping it seems obvious

Personally I would rent the property and the extra cash which could amount to anything from £500-1500 p/m (depending on LOCATION, south east it would be at higher end) and use this cash to clear debt/save. This would probably effect your benefits so you can transfer the property in your daughters name to get around it. Im sure you will get dogooders saying this is wrong but thats life

children under 18 can't own property

JustinCredibleGillespie

Be VERY careful if you are on Income Support, they will want your claim re-assessed if they find out you have inherited a property & they will also send out an independant valuer to put a price tag on it even if you aren't selling. It will need looked at by a Decision Maker.

If you do sell it, you will lose your means tested benefits instantly.

N.B Changing the property to your daughters name wont work either, thats the oldest trick in the book.

JCG

xx

SnowMan

Impossible to answer without more information but on the assumption that you are currently renting and have never lived in the house you inherited, and that your remaining capital including any inherited capital (other than the house) is less than £6,000 then the following is likely to be the case:

The money realised from the house sale will be treated as capital and will therefore exclude you from the means tested benefits such as Council Tax Benefit, Income Support and Housing Benefit which you are not eligible for if you have over 16K in capital.

Before the house is sold (i.e. the next couple of months or so) then it is likely that the value of the house will be excluded from being treated as capital for benefit purposes because there is a 26 week period (which can be extended if you have made every effort to sell) whereby the value of the house is excluded from being treated as capital and so your means tested benefits can continue until the house is sold. When the house is sold that all changes.

Although you may purchase another property using all/most of your capital I suspect this would almost certainly be treated as deprivation of capital and so you would not be entitled to have your means tested benefits restart/continue.

For capital purposes there is an exemption (relating to scenarios sucha s relationship breakdown or moving due to change in workplace etc) that if you sell your home with the intention of buying another one the capital is excluded for at least 26 weeks and then the new property purchased if you live in it is also excluded. However I believe this only applies if you lived in the former home which I am assuming isn't the case here (and in any case if the intention is to downsize say by purchasing a 200k property the balance of 40K will be treated as capital in any case).

If you downsize this will enable you to pay off your debts and give you some money to live on, although you will need a plan on how you will support yourself and your family without the help of benefits in the medium term.

Alternatively you could rent and use your capital to pay your housing and other costs.

I am not sure how the property would be treated if you abandoned the sale and moved into the inherited property and ended your existing tenancy (assuming you rent). However taht would give you no obvious means to pay off your debts.

You may want to seek advice from your nearest Citizens Advice Bureau on how the inheritance will affect your benefits. It is a complex area and please don't rely on the accuracy of this post which involves a number of assumptions.

You should also seek advice on how your inheritance will affect the debt relief order. Did you tell your authorised intermediary who arranged this about the inheritance?

oldtoolie

Big question here and a chance to change your life. Don't rush into anything. Don't jump into any dodgy investments or ill-planned business start-ups. (Don't suddenly get married?) Put the money in several bank savings accounts to start with.

First thing is to find out how this will impact your benefits -- perhaps Citizens Advice might help. Knowing that you can make a budget for the next two or three years.

Then think about what do you want to do with your life. Do you want to train for a new job? Do you want to move house? Do you want to buy your own house. What opportunities do you want for your children? Now is your chance to figure that out. Look for lots of advice but don't take just one person's advice. Make up your own mind.

aliasojo

CLAPTON wrote: »

children under 18 can't own property

Forgive my ignorance but what is the logic behind this?

Seems strange that in a hypothetical situation, my daughter could technically leave home at 16 but if we wanted to freely 'give' her a house (fat chance but never mind) she would not be allowed to own it until she was 18.