Slightly different situation from the norm...

Kirstiemcb

I'm currently awaiting a mortgage offer on my first home. My situation is slightly different from others, as it is a relatives house I am buying. Once everything is sorted and I officially own the house, I won't actually be moving into it for a good few months - reason being the relative is moving into the house I live in now, but only once its been extended. However, we need the money from the mortgage before my current house can be extended - still with with me??

A few questions I had - how will this work in terms of house insurance, electric/gas bills, council tax? Can all of this stay in my relatives name with her still paying it until I actually move into the house? Obviously, I would be paying the mortgage but can all of these other bills remain in her name until a certain date?

Thank you in advance

hazyjo

So you will become her landlord for a short while? Is your mortgage provider and solicitor aware?

Jx

Kirstiemcb

Hmmm not sure whether you could class it as being her landlord, as she wouldn't be paying me rent - I would be paying the mortgage as normal, its just the other bills on top that I would expect her to continue to pay for the time she remains in the house - I suppose in the same way someone renting a house would pay them.

I have made my MA aware of the situation and he has passed on the details to the solicitor (who I haven't really spoken to much as of yet)

robrooo

Yeah, as Jo says, you need to check your mortgage agreement, some have conditions regarding occupying the house, I would expect you need building insurance in your name too. As far as the other bills I don't think they would care who pays.

kingstreet

If you go along the "family purchase at undervalue" route, there is no way the lender will accept the "donor" continuing to live in the property after the sale.

Is it aware of this arrangement?

Kirstiemcb

I'm sorry - I've no idea what a "family purchase at undervalue" route is! I'm buying the house for what it has been valued at, but the relative is gifting me a 15% deposit. I've had no dealings with the lender as I'm going through a MA - but he is aware of the situation.

kingstreet

Which lender?

Gifting you equity, by reducing the price, or gifting you the cash for a normal deposit?

G_M

You are buying a house (from relative), and getting a mortgage? Your mortgage lender will insist the house isbought "with vacant possession" (ie, no one living there, especially not the vendor).

They (the lender) want to be sure that if you default on the mortgage they can repossess the house - but if someone else is living there and has rights to live there they can't repossess. Your relative will have acrued rights by having lived there many years as the owner.

You willhavetoinsure. Your relatve cannot insure something (the house) she does not own.

Utilities and council tax can stay in either name - that person will be legally liable. BUT, if in your relative's name that implies sheisa tenant. You become a landlord (which you probobly are anyway).

Fraught with problems......

Areyou using a solicitor? What does he say?

Kirstiemcb

Kingstreet - Its Abbey. Gifting me the equity I guess? Ie. they haven't actually handed me over the cash so I don't need to hand anything over to the lender - they just give my relative less money.

G_M - The solicitor has not long since been instructed so I've only had a very brief conversation with them - and to be honest I never considered this as an issue as this will only be for a couple of months until they are able to move into the extension where I currently live (not my house) - so wouldn't have thought to mention it to them!