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Right to buy (parents house)
tyty21
Posts: 25 Forumite
Hi all,
I'm wanting to buy my parents house with them. I am currently living there and have been for at least 1 year so I can share in the right to buy with them. I'm trying to work out the best way to do this.
My parents are 55 and 57 so the problem is their age when it comes to getting a mortgage. I however earn enough to borrow the required amount (when factoring in the discount) to purchase the property so if only my income needs to be used in the affordability checks will it matter that they are of that age?
The arrangement would then be that my parents would be responsible for x of the mortgage (equivalent to the rent they pay the HA now) and I would be responsible for the difference. I would own say 90% of the house and they would own 10%- all of this to be confirmed in a deed of trust.
5/10 years from now if we came to sell they would get some money out of it or I would buy out their 10%.
Does this sound feasible?
I'm wanting to buy my parents house with them. I am currently living there and have been for at least 1 year so I can share in the right to buy with them. I'm trying to work out the best way to do this.
My parents are 55 and 57 so the problem is their age when it comes to getting a mortgage. I however earn enough to borrow the required amount (when factoring in the discount) to purchase the property so if only my income needs to be used in the affordability checks will it matter that they are of that age?
The arrangement would then be that my parents would be responsible for x of the mortgage (equivalent to the rent they pay the HA now) and I would be responsible for the difference. I would own say 90% of the house and they would own 10%- all of this to be confirmed in a deed of trust.
5/10 years from now if we came to sell they would get some money out of it or I would buy out their 10%.
Does this sound feasible?
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Comments
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...The arrangement would then be that my parents would be responsible for x of the mortgage (equivalent to the rent they pay the HA now) and I would be responsible for the difference. ....
No, the arrangement will be that all three of you will be jointly liable for 100% of the mortgage. You will not be given a choice by the lender. However, how you split up the burden of the monthly repayments is up to you...I would own say 90% of the house and they would own 10%- all of this to be confirmed in a deed of trust.
5/10 years from now if we came to sell they would get some money out of it or I would buy out their 10%.
As long as it is consistent with RTB rules. Joint owners of a property can agree to share the benficial ownership in whatever proportion they fancy.
You likely need to speak to a mortgage broker to see how lenders view your proposal.0 -
How does the amount they'd be paying relate to the overall mortgage repayments?0
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they have earned the discount by living there and you swoop in and give them a measly 10%?
deeply unpleasant. where will they live when you sell the house? somewhere with insecure tenure I guess.2021 GC £1365.71/ £24000 -
BrassicWoman wrote: »they have earned the discount by living there and you swoop in and give them a measly 10%?
deeply unpleasant. where will they live when you sell the house? somewhere with insecure tenure I guess.
Sadly , these chancers are two a penny on here..........0 -
Hi all,
I'm wanting to buy my parents house with them. I am currently living there and have been for at least 1 year so I can share in the right to buy with them. I'm trying to work out the best way to do this.
My parents are 55 and 57 so the problem is their age when it comes to getting a mortgage. I however earn enough to borrow the required amount (when factoring in the discount) to purchase the property so if only my income needs to be used in the affordability checks will it matter that they are of that age?
The arrangement would then be that my parents would be responsible for x of the mortgage (equivalent to the rent they pay the HA now) and I would be responsible for the difference. I would own say 90% of the house and they would own 10%- all of this to be confirmed in a deed of trust.
5/10 years from now if we came to sell they would get some money out of it or I would buy out their 10%.
Does this sound feasible?
What happens to your parents if you lose your job and can't pay the mortgage? Or if you get married/get a partner, have children and want to move out? Or subsequently get divorced and the house is used as part of the settlement?
Only benefit I can see is to you, your parents get all the negatives.0 -
Save your own deposit and buy your own property.
Leave your parents to make there own decisions about RTB0 -
BrassicWoman wrote: »they have earned the discount by living there and you swoop in and give them a measly 10%?
deeply unpleasant. where will they live when you sell the house? somewhere with insecure tenure I guess.
Let's not assume everyone's a !!!!!!.... some people do want to look after their parents, after all, rather than just profit from them.
For all we know, the OP wants to buy the house and allow their parents to live in it rent-free in perpetuity.
Pointing out the potential downsides (parents losing security and potentially their home if OP loses their job) is one thing... but calling it "deeply unpleasant" is un-necessary when there's no evidence the OP is trying to screw their parents over. Just because it has potential pitfalls doesn't mean that the OP isn't trying to do a good thing.
Never assume malice where naivety will suffice."You did not pull yourself up by your bootstraps. You were lucky enough to come of age at a time when housing was cheap, welfare was generous, and inflation was high enough to wipe out any debts you acquired. I’m pleased for you, but please stop being so unbearably smug about it."0 -
Let's not assume everyone's a !!!!!!.... some people do want to look after their parents, after all, rather than just profit from them.
For all we know, the OP wants to buy the house and allow their parents to live in it rent-free in perpetuity.
OP is taking about owning 90% and selling in 5 - 10 years time....
I am not sure that comes across as benevolent!2021 GC £1365.71/ £24000 -
Missyhenry wrote: »How does the amount they'd be paying relate to the overall mortgage repayments?
They would simply pay the same amount they are currently paying in rent but instead that would go towards the mortgage payments- I would make up the difference.BrassicWoman wrote: »they have earned the discount by living there and you swoop in and give them a measly 10%?
deeply unpleasant. where will they live when you sell the house? somewhere with insecure tenure I guess.
I'm not sure what is unpleasant about being in a position to enable us to take up the right to buy when they would never have been able to afford to do it on their own...
You seem to forget as a relative and as someone who lives with them at home I have every right to share in their right to buy.
As for when WE sell the house, the plan is for them to be able to use their share of the sale proceeds (plus probably some help from myself) to buy out the half of a small flat my grandmother will be leaving my mother and her brother- again without taking up the right to buy they would never have that sort of money to be able to do that (incidentally neither would I have the money to help them do that).What happens to your parents if you lose your job and can't pay the mortgage? Or if you get married/get a partner, have children and want to move out? Or subsequently get divorced and the house is used as part of the settlement?
Only benefit I can see is to you, your parents get all the negatives.
Losing my job- I am in a professional career and so I don't see that happening however the mortgage amount we are talking about could be covered by working a few shifts in a supermarket each month (with RTB people are rarely 'giged up to their eyeballs and so the whole 'what happens if you lose your job' argument is rather redundant. Besides if everyone thought 'what happens if I lose my job' then no one would ever get mortgages.
Moving out- For sure I will want to move out (probably very soon) but that doesn't change anything? I will continue to pay for my part of the mortgage whilst paying rent somewhere.
As for your point about getting divorced and the house being part of the settlement- this smacks of desperately trying to scrap together reasons as to why you think I'm a bad guy; I really don't think that argument has any merit.
So for all out there who are swift to judge- what I'm trying to achieve is the purchase of the house that I currently live in with my parents by the three of us. For them to have no additional expense than what they currently have and for them to receive a decent sum when we come to sell to enable them to buy all 100% of a flat they will be left and thus live rent free. And yes at the same time I save a lot of money on buying a property but saving money doesn't make me a bad person- if you think that then you're on the wrong site!0 -
No, the arrangement will be that all three of you will be jointly liable for 100% of the mortgage. You will not be given a choice by the lender. However, how you split up the burden of the monthly repayments is up to you.
As long as it is consistent with RTB rules. Joint owners of a property can agree to share the benficial ownership in whatever proportion they fancy.
You likely need to speak to a mortgage broker to see how lenders view your proposal.
Yes for mortgage purposes we would be jointly liable however under the deed of trust I believe you can set out who will pay what. I will pay the difference between their current HA rent and the mortgage repayments. The beneficial ownership will be split as we'll be TiCs.
My only concern is if the bank assesses my income and includes rent outgoings (as I will want to move out). In that case my income probably wouldn't be sufficient for them to lend the amount needed (even though it would be sufficient to afford to pay the mortgage as my parents would be paying a share).
In that case I guess I would have to include my parents income in the assessment to show that together we can afford the repayments even with my paying rent somewhere else- this then comes to the problem of the ages of my parents.
So in short I guess I need a chat with a good mortgage broker.0
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