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Complicated mortgage

edited 30 November -1 at 1:00AM in Mortgages & Endowments
8 replies 1.3K views
nonnatusnonnatus Forumite
1.5K Posts
edited 30 November -1 at 1:00AM in Mortgages & Endowments
Right.

I'm a first time buyer, currently renting with my teenage children. £800 pcm. No savings, self-employed, established business, net profit approx £40k /year.

Would like to move in with my mother to live in large house with annexes. Living there would be me, needing office space, Mum, also runs business with me and kids (15 and 16 - as and when the leave hope, the annexes could have holiday let potential?)
Lots of animals which is our biggest hobby.

Seen the house we want for £450k. Mum has £200k savings which she is prepared to put all in. Currently living mortgage free in house, she now wants to sell the house, "give me" a further £100k for the house and keep £150k from sale of house (worth 250-300k, depending how fast it sells) for day to day living.

From my perspective, I'd want a mortgage for £150k, and a private arrangement to pay Mum back so that after 15 years, we both own an equal share of the property.

We've had so much different advice about how to do it and I'm getting confused. Mum's age is a problem (currently 63) as is my previous bankruptcy (BR 2004, discharged 4 months later 2005, dropped off credit file 2010).

Latest advise is Mum to "Gift" all money to me (planning to live the next 7 yrs) and Me to buy house, my name only on Deeds, mortgage etc. Very small LTV mortgage. Approached NatWest (business and personal bankers, know history of accounts etc REFUSE to deal with Previous BRs!!!)

Does anyone have any ideas about how to go about thei Multi-Generational living??

Replies

  • nonnatusnonnatus Forumite
    1.5K Posts
    Are we penalised in any way by Taxman, if Mum suddenly gives me large chunks of her money?
    I don't get tax credits, just housing Benefit. Mum has state pension and private pension.
  • Dave_HamDave_Ham Forumite
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    Only qualified to answer the mortgage question and other things being equal there will certainly be lenders willing to lend to you on good rates.

    This is so long as the money from Mum is a gift, any notion of a loan/shared ownership etc. will not be accepted by a lender.
    I am a Mortgage Broker
    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it.
    This signature is here as I follow MSE's Mortgage Adviser code of conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • You can still get housing benefit with net profit of 40k a year? Wow.
  • edited 31 January 2013 at 4:13PM
    holly_hobbyholly_hobby Forumite
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    edited 31 January 2013 at 4:13PM
    There are several issues with the current proposition.

    Firstly ...

    Although your BO has been discharged, and has also expired off your credit records, you still need to declare this if requested .... no matter how long ago the BO occurred (and even if later satisfied i.e you actually later repaid your creditors).

    Secondly

    We have Mum, whom wants to pch a property with you, which from her part will be obtained by her injecting cash in exchange for a share of ownership. If she goes onto the deeds to cement her legal ownership, the max mge term available will be based on her age (as well as her own status/credit record being assessed) - with most, except 1 high st lender, having max age of 75 yrs (I am assuming this will be C&I basis and not interest only, where HSBCs max age is 65 yrs).

    If she isn't to go onto the deeds because of the max term issues, then we have issues with her providing a capital injection/deposit, in exchange for her residency and essentially beneficial ownership of the property - as this can not be presented or argued to be a non-conditional gift given the reasons for its donation including the requirement (as you say) for you to repay her. And lenders don't like this at all, due to possessionary issues that this arrangement can throw, which can prejudice their application for a repossession order from the courts.

    So, we are really looking at a lender whom has an extended max age, and will consider ex-Bankrupts -to which I would suggest you may want to take a look and google National Counties BSociety (NB - this is not a recommendation but for general discussion), whom have no upper age limit (affordability sustaining of course), and will consider ex Bankrupts whom have been discharged for over 3 yrs. SE wise, you're looking at SA302's and a SA301 from HMRC for NCounties underwriting.

    Hope this helps ... let us know how you get on.

    Holly
  • getmore4lessgetmore4less Forumite
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    One advantage of going all in for cash is you don't need to service a mortgage.

    The £800pm rent left to fund day to day living.

    keeping back capital could mess up benifits
  • nonnatusnonnatus Forumite
    1.5K Posts
    Wow, Thanks Holly! I've printed off your detailed reply and will investigate later today.

    Saverbuyer - I DON'T get housing benefit!!?? I earn a nice wage thanks, and the only thing I get "given" is child benefit....
  • getmore4lessgetmore4less Forumite
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    nonnatus wrote: »
    Are we penalised in any way by Taxman, if Mum suddenly gives me large chunks of her money?
    I don't get tax credits, just housing Benefit. Mum has state pension and private pension.
    nonnatus wrote: »

    Saverbuyer - I DON'T get housing benefit!!?? I earn a nice wage thanks, and the only thing I get "given" is child benefit....

    Make your mind up
  • nonnatus wrote: »
    Wow, Thanks Holly! I've printed off your detailed reply and will investigate later today.

    Saverbuyer - I DON'T get housing benefit!!?? I earn a nice wage thanks, and the only thing I get "given" is child benefit....

    No need to shout.
This discussion has been closed.