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Adding daughter to mortgage or Selling property to daughter
GSWM
Posts: 4 Newbie
I’m a 60 something year old widowed retired nurse who stopped working three years ago due medical problems. For the first two and a half years after I stopped working my daughter was making the monthly payments for the mortgage of my house and paying for my upkeep (food, utility bills etc), as well as paying her own mortgage for her flat.
I was advised to apply for housing benefit about six months ago to take the strain off my daughter as she had just gotten married (to self-employed partner), is pregnant and living on an average income (£30k). I applied and the DSS currently pay my interest only mortgage.
The house is a large 3 bed that requires a lot of maintenance that I am not physically able to do. I also feel that it would be a great starter family house for my daughter and her husband when their baby arrives instead of the poky 1 bed flat that they live in.
I currently have about £190k left to pay off on the mortgage (property is valued at £280k) and was seeking some advice on the best way to transfer the property and mortgage to my daughter in the next few months so I can go and rent a one bed flat in a retirement building.
As she doesn’t earn enough money to get a £190k mortgage and her credit rating is only fair and not excellent, would the best decision be to:
A. Transfer equity/ ownership: We’ll find a broker who will approach my mortgage lenders (Birmingham Midshire) to add her name to the mortgage in the first instance and then a few months after she returns to work from her maternity leave she can approach another mortgage lender to buy the property outright. I’m not sure how this process works or if it’s at all possible and what the Stamp duty implications might be, if there will be a revaluation etc.
B. Selling property only: As she cannot afford £280k. I wondered if I could make a non-cash gifted deposit of £90k, then she will need to find a way to get a mortgage with her husband for £190k. Only problem is that he (the husband) was made redundant in 2012 and as he hasn’t been able to find a job has been freelancing but doesn’t make much money or have adequate proof of income.
Sorry that this is a long write up, but wanted to give you a full picture of the situation. I would really appreciate any advice on this before approaching a mortgage broker, conveyancer or solicitor.
I was advised to apply for housing benefit about six months ago to take the strain off my daughter as she had just gotten married (to self-employed partner), is pregnant and living on an average income (£30k). I applied and the DSS currently pay my interest only mortgage.
The house is a large 3 bed that requires a lot of maintenance that I am not physically able to do. I also feel that it would be a great starter family house for my daughter and her husband when their baby arrives instead of the poky 1 bed flat that they live in.
I currently have about £190k left to pay off on the mortgage (property is valued at £280k) and was seeking some advice on the best way to transfer the property and mortgage to my daughter in the next few months so I can go and rent a one bed flat in a retirement building.
As she doesn’t earn enough money to get a £190k mortgage and her credit rating is only fair and not excellent, would the best decision be to:
A. Transfer equity/ ownership: We’ll find a broker who will approach my mortgage lenders (Birmingham Midshire) to add her name to the mortgage in the first instance and then a few months after she returns to work from her maternity leave she can approach another mortgage lender to buy the property outright. I’m not sure how this process works or if it’s at all possible and what the Stamp duty implications might be, if there will be a revaluation etc.
B. Selling property only: As she cannot afford £280k. I wondered if I could make a non-cash gifted deposit of £90k, then she will need to find a way to get a mortgage with her husband for £190k. Only problem is that he (the husband) was made redundant in 2012 and as he hasn’t been able to find a job has been freelancing but doesn’t make much money or have adequate proof of income.
Sorry that this is a long write up, but wanted to give you a full picture of the situation. I would really appreciate any advice on this before approaching a mortgage broker, conveyancer or solicitor.
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Comments
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If you sell the property to your daughter where exactly will you be living?An opinion is just that..... An opinion0
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Your daughter won't be able to go on the mortgage unless she is assessed as being able to pay it.
If you were able to find someone who would do it and your daughter is getting means tested benefits, those could be affected as she would be a property owner.
Read up on deprivation of capital regarding your own situation. If you give away your house, you won't be able to get benefits to pay your rent.0 -
@Building_Surveyor
I'm planning to move into a 1 bed flat for over 55's.0 -
@ Mojisola
My daughter isn't on benefits, she works but will be going on maternity leave in a few months time.
But thanks for mentioning 'deprivation of capital', i've never heard of it before. I'll google to get further details.0 -
@ Mojisola
My daughter isn't on benefits, she works but will be going on maternity leave in a few months time.
But thanks for mentioning 'deprivation of capital', i've never heard of it before. I'll google to get further details.
Not your daughter on benefits, you.
Theoretically you could sell the house for market value and live off the 90k. As you are deciding to give this 90k to your daughter, why should the benefit system then pay your rent on a new place? That's what it meant by deprivation do assets. Also if you need care within the next so many years, you won't get it paid for as again, you've given your own money away.
Please read up on it before you make any rash decisions, I understand you want to help your daughter but you could be digging a hole for yourself.0
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