Should I help buy my parent's council house?

SephirothX

BobQ wrote: »

Its not an easy decision. If you decide not to buy yourself, its a good opportunity to make an investment while ensuring the roof over your head. Either way make sure you make the property tenants in common so your share is isolated and not part of their estate. Another consideration is what happens if your parents health, employent is not as expected. What if yiou lose your job? I take it wou would not want to force the sale of the house if the situation changed? What is the state of the property? Can you afford to pay your share of maintenance costs? All of this needs to be considered.

That said if you need/want to buy your own it will limit the scope you have to do this as it will count as a commitment. Conversely it would demonstrate that your abity to deal with a mortgage and help your credit history.

I doubt that anyone can give you conclusive advice. On the one hand you get a couple of promotions and decide to stay in your parents place for 5 years and you will own a good share in one house and an affordable mortgage in another. On the other you cannot afford the house you want next year when your new girlfriend annouces she is having twins! I think all you can do is consider all the things that could go right and wrong and decide for yourself.

Yeah if I lost my job they'd be screwed and forced to sell unless I poured my savings into it. But considering how fast the company I work for is growing and how vital my role is the only way I'd lose my job is through sacking.

I don't think I could get it in a joint name, the council probably wouldn't be giving the full discount then. Basically for me this would be me handing over £165 per month to my dad to pay the mortgage.

Ill health of the parents is something to consider but how can one even begin to predict that? They both fine now but old age can change that quick and unexpectedly. I think they'd have life insurance however but this only offers protection in the event of death I think?

I think the parents would cover the associated costs with running your own home. Problem is they don't seem to know what all that is and neither do I.

BobQ

McKneff wrote: »

The first thing is the mortgage would have to be in your parents name, they would be assessed to see if they could afford this money that they are going to borrow, at that time, you and your money are irrelevant.

Is your name on the tenancy with your parents.

Not true/relevant https://www.gov.uk/right-to-buy-buying-your-council-home/overview

Joint applications

You can make a joint application with:

• someone who shares your tenancy
• up to 3 family members who’ve lived with you for the past 12 months (even if they don’t share your tenancy)

SephirothX

Mojisola wrote: »

There are all sorts of possible problems which might not happen but it's best to think through the worst before you commit.

You will be committed to paying that money for next 8+ years. What's going to happen in your life in the next 8 years - meeting a partner, becoming unemployed, getting a long term illness - how would you pay your share then?

As well as paying the mortgage, you and your parents would be responsible for all maintenance and repairs. What if the central heating boiler needed replacing? Or the roof needed repairs?

If you move out, you will be paying for two homes at the same time. How are you going to manage that?

If your parents need residential care, the value of the house may be lost to care home fees and, with it, all the money you have paid out.

My mum keeps insisting that she'll never go into a care home. But you never know. Her parents pretty much avoided them all through ill health and it wasn't until my grandmother died that my grandfather went into one for the last half year of his life. I can imagine a similar thing with my parents as they aren't a fan of care homes. They will be wanting a bungalow in about 10 years time.

And it might seem like a lot "paying for 2 homes" but £160 per month is way below the cost you'd pay for a single home so it's probably more along the lines of paying for 1.3 homes rather than 2.

SephirothX

BobQ wrote: »

Not true/relevant https://www.gov.uk/right-to-buy-buying-your-council-home/overview

Joint applications

You can make a joint application with:

• someone who shares your tenancy
• up to 3 family members who’ve lived with you for the past 12 months (even if they don’t share your tenancy)

Interesting. Seems they could jointly buy it with me but really do I want my name on the mortgage at all? That sounds like it would harm my chances of getting my own the most.

japmis

paddedjohn wrote: »

edit to add, it looks like the OP will be getting the mortgage so that will more or less ruin his chances of getting another one on his wage.

yes absolutely :-/

BobQ

SephirothX wrote: »

Yeah if I lost my job they'd be screwed and forced to sell unless I poured my savings into it. But considering how fast the company I work for is growing and how vital my role is the only way I'd lose my job is through sacking. "There is no indispensible man"

I don't think I could get it in a joint name, the council probably wouldn't be giving the full discount then. Basically for me this would be me handing over £165 per month to my dad to pay the mortgage. See my other post, but I do not if the discount would be affected if you applied jointly. However, look at the link I posted and follow it to page 2 and it states:

If you’re buying with someone else, you count the years of whoever’s been a
public sector tenant the longest.

You’ll usually have to repay some or all your discount if you sell your home within 5 years.

Ill health of the parents is something to consider but how can one even begin to predict that? They both fine now but old age can change that quick and unexpectedly. I think they'd have life insurance however but this only offers protection in the event of death I think? Life insurance could be purchased at their age to protect you and your parents interests. The issue that needs to be considered is the probability that say one died and the other needed to go into a residential home (or both needed it). In this event then your investment (if you were not on the deeds) would soon be used. Another factor is whether they could afford the mortgage in such circumstances.

I think the parents would cover the associated costs with running your own home. Problem is they don't seem to know what all that is and neither do I. A Council House is probably well maintained at present. However, suppose the central heating boiler needed replacing or the windows needed to be replaced? May not be an issue or likely but these things happen.

See comments above ........................

SephirothX

japmis wrote: »

yes absolutely :-/

It would be in my dad's name only, or at least that's the current plan.

For me it would pretty much be a £16k debt that I pay via a direct debit to my dad's bank account every month.

For him it's a £29k mortgage with interest taking it up to around £32k which the bank thinks he can afford without taking into account outside income (my payment).

SephirothX

BobQ wrote: »

See comments above ........................

You made that difficult to reply to since I can't quote it.

I agree no man is indispensible, but my role is that vital if they got rid of me I'd need replacing, meaning it would only realistically happen through sacking and everyone has that risk. I can't help but feel I should be earning more for what I do but I've only been in the job a year and a half.

Regarding life insurance and care homes I don't even think they have considered that if you own your own home you have to sell it to pay for care rather than the government funding your care when you have no such assets.

Maintenance costs definitely need looking into. We've had a problem with the shower leaking through to the kitchen ceiling in recent months since we put the right to buy application in and I can only imagine what that would cost to get fixed if we had to fund it. The worst part is they tried to fix it once already a month ago and it came back last week. Guessing that bill would run into hundreds as they've had to dig holes in the ceiling and then replace the board.

Edit: I'm off to bed now, I'll come back to this thread tomorrow after work, surprised at the level of interest!

BobQ

paddedjohn wrote: »

If the OP goes for a mortgage in the future then they will need to see his bank statement, this will show that the OP has an outstanding commitment of £165 per month which will be taken into cosideration by the bank when deciding how much they can loan.

edit to add, it looks like the OP will be getting the mortgage so that will more or less ruin his chances of getting another one on his wage.

Yes in the short term, but if he does get a promotion and waits a few years he may be able to afford both given the value of properties in his area and that he would still be saving and be able to put down a substantial deposit. Not an easy decision I agree. Or he could take in a couple of lodgers!:)

SephirothX

BobQ wrote: »

Yes in the short term, but if he does get a promotion and waits a few years he may be able to afford both given the value of properties in his area and that he would still be saving and be able to put down a substantial deposit. Not an easy decision I agree. Or he could take in a couple of lodgers!:)

Hah a promotion? I'm the only person in my department. Which does concern me for career advancement. But it's likely my department will expand to two this year so who knows further down the line.

Anyway bed time as mentioned a few minutes ago.