Buying with a family member with a difference

biglad

Hi There

I will be in a position to be able to get a mortgage in the new year and my wife has the mortgage for our house in her name only as when it was all going through my credit was bad so we have just left it like that.

My mom is currently on benefits as she looks after my severly autistic soon however the house is not suitable for her at the moment however she doesnt want to rent and cant afford a property.

She has a mortgage of around £20k and a legal aid bill of around £15k so after the sale of her house she will have around £70k to put on her house but doesnt want this to be dwindelled away on renting and she doesnt want to lose her benefits as she can not go out to work.

Would it be possible for her to put down the £70k on a house and I get a mortgage to cover the rest of the house. Another option would be me and her get a mortgage for the remainder of the property.

Also I was wondering whether or not we would need to get something drawn up to say I only own a percentage of what I have paid. This isnt a major issue as in my moms will I am down to receive my moms estate due to my brother.

Finally would it make a difference in the property I own, would it be better for lending purposes etc if I owned half of the house completely rather than just a small bit. I will be looking to go on the mortgage with my wife in the near future so whatever would look best in this sense.

Thanks in advance and any help / advice is appreciated.

BigAunty

What benefit is she on?

Are you expecting her to pay any rent? If you are not expecting her to pay rent, can you afford the mortgage?

As an owner, she is not entitled to housing benefit. If you own it in your sole name, then she has gifted you tens of thousands of pounds that the local council and DWP would have expected her to use to fund her everday living expenses. She may be classed as intentionally depriving herself of capital and these organisations will treat her like she still has means (known as notional capital).

BitterAndTwisted

What your mother is considering doing is extremely foolish. Just because she gives you her £70k from the sale of the property it will not mean that she will still be entitled to all of the benefits she is receiving now if they are means-tested.
Why shouldn't she use the proceeds from the sale to pay to rent a more suitable property?

Google "Deprivation of Assets"

Old_Git

if she buys a house her name need to be on it .Your name or both names can be on a mortgage but you wont get help with paying it.

Yorkie1

Who will be living at the house?

Is it proposed that she is the only occupier, but that you are joint mortgage holders? Not sure that's going to work - on top of all the other issues already raised on this thread.

Janep

Yes, you are able to do this, I have bought a house with a house mate I paid £80000 and he has a mortgage £80000, I have a deed of trust drawn up to state that if he was to sell then I would get the first £80000 and any profit we make we splitt 50/50.

biglad

Thanks for your replies

maybe i didnt write it properly however we are not expecting help from the social, she is in receipt of carers allowance and job seekers.

With regard to her use the money to rent somewhere more suitable, why put herself in a worse position. Im just trying to help my mom out.

I wont be living there as i will be in my own house, i was looking at it in terms of an investement, similar to shared ownership but i own 50% and so does she.

Ps. People are very quick to judge and prob dont think she needs help as she currently owns a home and is better off than some, but everyone is different! This forum isnt as friendly as the others but thanks for your help

Yorkie1

Others will confirm the position, but I am not convinced you will be able to get a mortgage.

I don't think you will be able to secure a joint one because you will not be living there - so not eligible for a residential mortgage.

She wouldn't be able to get one on her own owing to insufficient income.

You would be unlikely (I think) to get one on your own because the deposit is coming from someone who will be living in the property but not on the deeds / mortgage - the lender will be concerned about being unable to realise their interest if needed, because your mum could try to make a claim on the property.

I don't think you'd get a BTL mortgage because a) family will be living there, and b) you won't have a tenancy agreement / rental income.

But, as I say, this view would need to be checked by a mortgage broker. There may be unusual products that do fit the matter.

getmore4less

Janep wrote: »

Yes, you are able to do this, I have bought a house with a house mate I paid £80000 and he has a mortgage £80000, I have a deed of trust drawn up to state that if he was to sell then I would get the first £80000 and any profit we make we splitt 50/50.

Thats not the way to do it.

You should split 50:50 then the other person pays of the mortgage

Frogletina

Janep wrote: »

Yes, you are able to do this, I have bought a house with a house mate I paid £80000 and he has a mortgage £80000, I have a deed of trust drawn up to state that if he was to sell then I would get the first £80000 and any profit we make we splitt 50/50.

getmore4less wrote: »

Thats not the way to do it.

You should split 50:50 then the other person pays of the mortgage

Glad I was not the only one to see the flaw in this. I wonder if any advice was sought before the deed of trust was drawn up.

Poppy9

Have you thought about extending/adapting your mother's current house or is critical she moves?

If there is sufficient equity in your house you and your wife could remortgage your home and use the money to help your mother out

If adaptation would make the home suitable are these things that SS could help with.