Buying house from my mum

mak83

Hello All

Im looking for some advice... My dad past away this year and did not have any insurance to cover off the mortgage on there property. So my mum now has a 35k mortgage to pay with monthly payments which are too high for her to cover long term.

The property is worth approx £120k what I was looking at doing was purchasing the property off her at less than market price i.e. £60k this would pay off her mortgage and leave her with some money as savings. I would then be looking at renting the property back to her.

My question is can this be done as Im aware some lenders will not allow you to rent it back to the original vendor (my mum) if it can be done do you know of any lenders that will do this that you can recommend? Also would I need to pay a deposit on a mortgage due to purchasing the property at 50% of its market value?

Thanks!

craftynutters

Would your mum be happy about you only giving her half the value of the house i know i wouldnt be

getmore4less

Why not just help her with the mortgage,

if you need enough rent to cover your mortgage she will still struggle.

PasturesNew

If she's struggling to pay a £35k mortgage, how will she manage to pay you rent?

mak83

craftynutters wrote: »

Would your mum be happy about you only giving her half the value of the house i know i wouldnt be

we have discussed it and she would be ok with this

mak83

PasturesNew wrote: »

If she's struggling to pay a £35k mortgage, how will she manage to pay you rent?

The Mortgage has approx 5 years left but there is also a secured loan on the property with the same lender which has 19 years left

The Mortgage is £380 per month and the loan is £178 per month the APR on the loan is mad and she will still be paying this when shes 80+

The 35k is the approx settlement figures

I was looking at a rent payment of £300

Annisele

Effectively you're talking about a gifted deposit (the £60k equity) with the person who gave the gift remaining in the property. In those circumstances, I don't know of any lenders who'd lend on your mum's property.

Do you have a property of your own? If so, it might be possible for you to raise enough against your own property to repay your mum's debts.

Mojisola

So she would be giving you £60k and you would be taking another £300 a month off her? Nice arrangement!

shop-to-drop

Mojisola wrote: »

So she would be giving you £60k and you would be taking another £300 a month off her? Nice arrangement!

This is not how you may like to think about it but it does sum it up simply. This kind of arrangement is very messy and if it can be done can sometimes end up being a very bad idea for both parties.

Try to think of another way to help mum. Could she take in a lodger perhaps or downsize?

GMS

You will struggle to find a lender for this as the vendor would remain in the property creating rights in the event of repossession.

Ensure you are up front and have agreement prior to parting with funds.

Sale and rent back is not something lenders are keen to do.

Also if you are hoping to use housing benefit you wouldnt be able to as it would be a contrived tenancy

Mojisola

And, depending on mother's age, deprivation of capital may have to be taken into account.