Can we buy parents house outright then let them live in it?

SnooksNJ

freeisgood wrote: »

Buy a house worth 70K for 45K......AND get 35K "cashback" ...AND get rental money every month. Very nice! :P

Essentially with a small correction. Get rental money paid for by the good taxpayers of this country.

AdrianC

TheSilentMeow wrote: »

My husband and I want to buy his mothers house outright for the full value, which Zoopla estimates is approx £75k. We will be raising this by re-mortgaging my property. The mortgage left on his mothers property is £40k, so the £75k will pay that off leaving £35k over, which she will use to pay for renovation work on our property, meaning on paper we will have bought for the full value, but in reality we will have only paid £45k as the rest is essentially being used by us. She would be responsible for covering council tax and bills etc and would probably give us £150-£200 a month or whatever she can afford as rent. Currently her mortgage repayments are £450, and with bills and council tax etc, she is left with hardly anything to live on. We saw this as a solution that would benefit us all.

We are really eager to do this but someone I've spoken to about it says we are not allowed because it is a sale and rent back scheme and its now regulated by the FCA, so it would be illegal for her to live there after. I was wondering if anyone knew anything about this and could advise us on the best way forward.

Thank you.

Apart from all the gaping holes that others have already pointed at, since when did the "Zoopla value" bear any resemblance to any form of reality?

Surely the easiest, neatest, and best solution would be for the OP and husband to simply pay off the mortgage - either by releasing equity from their own property, or by taking over the payments, depending on whichever works out cheaper interest. If the M-i-L has some money left over each month, then she can contribute towards the payments.

Job jobbed, everybody happy. Right?

AnotherJoe

AdrianC wrote: »

Apart from all the gaping holes that others have already pointed at, since when did the "Zoopla value" bear any resemblance to any form of reality?

Surely the easiest, neatest, and best solution would be for the OP and husband to simply pay off the mortgage - either by releasing equity from their own property, or by taking over the payments, depending on whichever works out cheaper interest. If the M-i-L has some money left over each month, then she can contribute towards the payments.

Job jobbed, everybody happy. Right?

Indeed. Also far cheaper as no solicitors involved, and the OP still get their £35k to spend on their house as they wont be spending it to buy MILs house. And avoids all the benefits issues.

Ozzuk

I think this bit jumps out: "We saw this as a solution that would benefit us all."

there are better solutions that have been suggested that benefit your MiL greatly. What you are ultimately trying to do is secure your inheritance, if you weren't then you'd simply take a charge on property as suggested or buy the whole property and give her the cash. And I totally get this is likely what your MiL would want, of course she'd prefer the money to go to you than the state, but it doesn't work like that.

And yes this is a business and money forum, what you are suggesting is wrong and people are telling you that. There are a lot of similar threads as this that come up because people naturally either want their children to benefit, or children see their inheritance as their right but inheritance is only what is left after any required care is paid for. Fair? that is a different question, maybe it isn't. But we're not debating that.

AdrianC

Ozzuk wrote: »

if you weren't then you'd simply take a charge on property as suggested

Why on earth would you do that? Don't you trust her...?

mumps

pinkteapot wrote: »

So, mother's mortgage gets cleared but she loses all of the equity in her house (£35k) because she has to spend it renovating your house. All she gets for giving up that £35k is the ability to pay £150-200/month instead of £450/month in mortgage/rent costs.

Doesn't mother benefit from up to £300 extra per month and a nicer house, I am assuming spending £35k on a house will mean it is a much nicer environment for her.

I see the £35k isn't being spent on the house the mother lives in. That's a whole different matter.

Mojisola

TheSilentMeow wrote: »

The mortgage left on his mothers property is £40k

AdrianC wrote: »

Why on earth would you do that? Don't you trust her...?

If TheSilentMeow and partner paid off the mortgage (ie, loaned the money to his mother) and took a charge on the house then they will get that repaid if the house is sold because of her care needs.

AdrianC

Exactly. Their inheritance above their mother's needs.

Mojisola

AdrianC wrote: »

Exactly. Their inheritance above their mother's needs.

If they give the mother £40k, I don't think it's unreasonable to expect that to be paid back when the house is sold.

fed_up_and_stressed

AdrianC wrote: »

Apart from all the gaping holes that others have already pointed at, since when did the "Zoopla value" bear any resemblance to any form of reality?

Surely the easiest, neatest, and best solution would be for the OP and husband to simply pay off the mortgage - either by releasing equity from their own property, or by taking over the payments, depending on whichever works out cheaper interest. If the M-i-L has some money left over each month, then she can contribute towards the payments.

Job jobbed, everybody happy. Right?

but reading the thread it seems the outcome the OP was after was for in essence the UK taxpayers to pay for their house repairs rather than M-I-L.