Daughters Mortgage

Evidence

I am taking over my daughters mortgage as she is unable to pay it. Therefore the property will be owned by me. There is quite a lot of equity in the home. She is currently on benefits with 3 children. Does anyone know if she will be entitled to housing benefit after I take over the mortgage and legally own the house?

ACG

Im assuming you mean you are taking out a mortgage in your own name to purchase the property? If its just you paying her mortgage then you would not own the property.

There will be some tax benefits she will be entitled to but you would be best speaking to the job centre people or there is another forum on here for benefits.

Thrugelmir

Evidence wrote: »

Does anyone know if she will be entitled to housing benefit after I take over the mortgage and legally own the house?

What's happening to your daughters equity?

Where is she going to live when you own the property?

Dave_Ham

So she gifts you equity and thus has under £16k and can claim full benefits. You then take full rent on your (her) property that is maintained by housing benefit?

I think the Government may want answers on where the equity went?

Dave_Ham

Additionally, you cannot just take over a property. Mortgage/Legal issues will need to be overcome and her selling at undervalue/declaring as such and then telling the council she has no money could unravel badly

holly_hobby

You have taken over the mortage, OR you are hoping to take over ? (ie essentially pch the property from her in a NEW mortgage under your OWN NAME and status ?)

If you intend to do this with a mortgage (which if you intend to let to her and obtain housing benefit, would be a regulated buy to let and based on your age and income), you will find additional issues in the fact that typically all lenders prohibit the continued residence of the Vendor post completion, as this can prevent the succesful petition for a later possession order in the event of default, which is why vacant possession is always demanded.

If you already have your mortgage agreed (by possibly not revealilng there won't be vacant possession on completion), then its your daughter that needs to speak to the DWP - and if she has sold her property to you at under value, she may well fail any MT assessment as a result of deprivation of assets test, and as the prev owner I doubt she'll qualify for any HB as a contrived exercise.

You will also be exposed to CGT on disposal, it will form part of your estate for IHT and it will need to be taken account of in your will etc.

IF this is currently a plan, then it really needs a re-think.

Can I ask if your daughter (if she is in reciept of income support, income related JSA), has applied for SMI (support for mortgage interest) and all other qualifying benefits ?

The SMI would at least take care of the mge interest (upto 200k mge and if the interest rate is below 3.63%), but if she is on a repayment mortgage, she will need to negotiate with the lender a repayment arrangement with regards the capital repayments (inc switching the whole mge temporarily to IO).

Perhaps she should have a chat with the local DWP or citizens advice to see if she is in receipt of all eligible benefits/assistance available to her, before mistakes are made that may be hard to unravel.

Hope this helps

Holly xx

PS - link for SMI guidance - https://www.gov.uk/support-for-mortgage-interest/what-youll-get

RichardD1970

You were given full and frank answers on the other thread you started a few days ago.

Why do you think asking again will change what you were told?

Yorkie1

RichardD1970 wrote: »

You were given full and frank answers on the other thread you started a few days ago.

Why do you think asking again will change what you were told?

Thought it sounded familiar.

https://forums.moneysavingexpert.com/discussion/4828557=