Mortgage natwest

Lipstick85

Hi,

Any help is appreciated.
I currently live in a property which I am going to rent out survey has been done and paid for and mortgage offer received.
I was then going to buy my parents house again survey has been completed and mortgage offer received.My parents were going to deed of gift me around 30k to pay a deposit on a new home I was going to live in. I was going to use the remaining money to pay their mortgage off. The Natwest is aware of this
However my mam is on sickness benefit and my dad has lost his job and seeking job seekers allowance.

We are worried deed of gifting would stop his money.Therefore could we amend the purchase property of the house and advise we are using the remaining equity for a deposit on a new home or would we need to go through the mortgage process again?

Time is running out for me cos my tenants need to be in this week.

Thanks

bigadaj

Your explanation isn't clear, where will your parents be living?
if they give you money then it could be seen as avoiding the limits for means tested benefits and this would mean they would be excluded from claiming.
Might be best if you have another go at explaining exactly what you're doing.

holly_hobby

I'm a bit confused ... is this the situation ?

Property one

Currently your primary residence, you intend to move out and let it. You have a mge offer on this - presume this is a buy to let remortgage you've obtained.

Mum & Dads
You're buying it from them - mge offer in.

They are gifting you 30k - some of which is to use as your deposit on another house ? you intend to move into, and the remainder you are using to repay their mge.

Third House (your new primary residence ?)

Having let your current home, and bought Mum & Dads, you are also buying a further property to be your home and primary residence ? Of which some of the above 30k from parents is to act as a gifted deposit ?

Is that all correct ?

If so, there are a several issues I can see ...

property no 1 is fine - nothing there (if on a buy to let mge, or CTL has been obtained).

Its Mum/Dad where the issues begin .... are you buying it from them, but they are to remain resident ?

If this is the case, is the lender aware of this ? I would think not if you have recd a mge offer, but if you can confirm you have advised them that you are buying from Mum and Dad, but they are NOT moving out, that would be good. If of course they are moving out to live in another property, this is not an issue.

You then say that you are using some of the 30k they intend to give you, to repay their mge, but whats confusing is that they will have to wholly redeem their mge when they sell to you from the sale proceeeds .... (where I presume the 30k gift is coming from), so not quite sure whats going on here at all ?

Property and mge no 3, is the lender aware that on completion you will have 1 let property, plus a 2nd mged property (not in receipt of rent if parents to reside there, or is this to be let too ?).

Yes, in respect of means tested benefits/long term care assistance, this will be cited as deprevation of assets, and their entitlement will be assessed as if they had never made the gift.


Holly

Lipstick85

Sorry my parents will still be living in the property.

My main questions are would my dads benefit be stopped by having a deed of gift?

And would the Natwest allow us to still get a mortgage of approx 63k ( this would be leaving 25 percent in the house on a buy to let basis) to purchase the house 26k and use the remainder for a new property?

Thanks

holly_hobby

Right - well for a start your parents selling and remaining resident in a property that is to be mortgaged is a no-no for most lenders - this is due to possessionary issues, and I can only assume they don't know the plan, and as the Solicitor will have to confirm vacant possession - there's your issue.

Yes, means tested benefits will be affected by any deprevation of assets (reduction of capital held in this case). Importantly, the free equity/value of a primary residence is not included in means tested benefits, ONLY when talking long term care state funded provision when it is assessed - so if MT benefits is the reason for selling their home, it will cause problems not solve them, and if state funded long term care is sought, selling their home WILL be classed as deprevation of assets and cause issues.

You can only have 1 (1st charge) mge on 1 property, the Nat West paragraph makes absolutely no sense at all ... could you have another stab at what you mean/are trying to say ?

Hope this helps

Holly

Lipstick85

Hi Holly,

Thanks for your reply I know it's confusing and I thought I had explained it.
Sorry.
Yes that's correct with property number one.

Mam and dads
they will pay the remaining mortgage then gift me the remaining money.

Yes the third property will be our main residence and the mortgage for my mam and dads will be a buy to let which they will remain in the broker is aware my mam and dad are remaining in the property.

Yes the lender is aware we will have two buy to let properties.

My main questions are will my mam and dad still receive their benefits even though they have gifted us around 30k?

Also if the benefits would be stopped we would probably need to look at a new mortgage.

What we would need to do is to get a mortgage for say 85k but the purchase price of the property be 26k (amount remaining on my parents mortgage) and not sure if we can do this?

Thanks

Lipstick85

Sorry if my parents benefits would be stopped which from what you are saying it sounds like it would be I would need to look at another way around it.

My other option is to change the mortgage on my parents house.
This would involve me buying the property for 26k which would pay off their mortgage.

I would then need to release the equity in the property to enable me to have a deposit for the house I want to live in. Would this be a possibility?

Thank you for your patience

Lipstick85

Just to confirm there would be a buy to let mortgage on the property I am in now.

A buy to let mortgage on my parents house

A 'normal' mortgage on the house I would be moving into.

Hope I am making sense. I'm really worried we were jus about to exchange contracts when this has occurred.

Lipstick85

To be honest the reason my parents are selling me their home is because there mortgage ends next year and if my dad does not have a job they will be forced to sell it.

The other reason they are selling it is to enable me to move.

Thrugelmir

Lipstick85 wrote: »

Hope I am making sense. I'm really worried we were jus about to exchange contracts when this has occurred.

Exchange contracts on which property?

I think you need to consider everything carefully. As there's many points to consider.

kingstreet

Are they giving you cash to use as your deposit to buy their house, or are you purchasing from them at undervalue?