Why can i not purchase my family home for less?

aviii

I am a bit confessed -
my folks have an outstanding Mortgage of about £50k - they are struggling with all their expenses - that aside -


They though they could sell the house to the children for say £60k - market value about £270k.
The property is going to go to us children anyway and more likely the unpaid mortgage when they pass away.


however, they have been told by their bank advisor - that they cannot sell the house for that price.


I do not understand this - its their house (I know not officially) why cannot they sell for what they want? the bank still gets paid, we may even take out a mortgage with the same bank.


What is it that I am not understanding..?

getmore4less

They can sell it for whatever they like,

You give them £60k they pay off the mortgage and transfer the house to you

There will be implication and complications.
Taxes,deprivation of assets and raising money if needed are three areas that would need carefull consideration there will be others.


They need to go back and ask this bank advisor to put in writing the reasons they cannot sell it for £60k

Dave_Ham

You can, but maybe the specific bank do not allow these sort of purchases.

There are lots of variables to consider as directed to above, definitely worth getting formal advice and representation.

The specific barrier with many lenders will be them gifting you the equity and remaining to live in the property. This is not with all lenders, but many

Good luck

aviii

The words "gifting of equity" and "reminding to live in the property" was mention.


My folks being simpletons about matters like this, just believe what they are told.


I could not see any issues - but maybe I being naïve.


I will research more on to it.


If in a couple of year we ( children) manage to raise the fund to help and gave it to our folks to pay off the Montague -
I assume this means our folks can do what they like with the property - ie - sign it over to us children and live still live there.?


any implication I could be considering ? or would anyone agree this would be the better option..?


cheers

betmunch

If they are selling it to you using the equity in the property as deposit and remaining in the property then it can be done.


Having said that its not for every lender, in fact off the top of my head I can think of only one.


If they don't bank with that lender then what the bank salesman told them was correct.


All you need to do is instruct a competent broker and it will all be fixed, assuming the above is the only issue stopping the application.

JimmyTheWig

Dave_Ham wrote: »

maybe the specific bank do not allow these sort of purchases.

But it wouldn't be up to them, would it?
Wouldn't it be up to the bank the children want to use for a mortgage?

Dave_Ham

Yes, I imagine the bank colleague wrongly assumed that their policy was the same the world over on this type of transaction.

In reality, you are correct though; it only matters to the potential incoming lender.

foxy-stoat

aviii wrote: »

I am a bit confessed -
my folks have an outstanding Mortgage of about £50k - they are struggling with all their expenses - that aside -


They though they could sell the house to the children for say £60k - market value about £270k.
The property is going to go to us children anyway and more likely the unpaid mortgage when they pass away.

Why dont you all save yourself, and your folks, the legal and mortgage fees and just pay their mortgage for them?

As you have said, the peoperty will be left for you all in their Will.

Case closed !

getmore4less

I think the misunderstanding probably came about because they asked if they could sell the house and transfer/have family get a new mortgage.

What they really ment(or even said) was they won't lend.

MacMickster

Deprivation of assets for benefits purposes or potential future care home fees need to be considered carefully.

If one of your parents should need to go into a care home, and they have effectively given away a huge amount of money to their children, then the care home fees won't be funded by the state. Can you and your siblings afford to pay £600 to £800 per week for them if it came to that?

antrobus

aviii wrote: »

...any implication I could be considering ?

Pre owned asset tax.
http://www.taxguide.co.uk/content/about-poat-pre-owned-assets-tax