Buying a parents house

emmasaunders70

foxy-stoat wrote: »

For her sake I hope not.

1. She would lose her housing benefit as her landlord would be her Mother.
2. You would unlikely be able to get a regualated BTL mortgage (renting to family)
3. Some lenders are not keen on buying property from somone who will remain living there.
4. The rent would need to be 125% the mortgage payment.
5. You would have to pay income take on the profit.

You would be better off transfering her mortgage payment to her a few days before its due. Problem solved, she would live there mortgage free and you will eventally inherit the house anyway.

Why do you say 'for her sake I hope not' I am in no way trying to take advantage of my mother but just to get some advice on how to improve the situation we are both in at present. I am transferring money in to her account every month to cover the shortfall the housing benefit does not cover. She has no life insurance as she cancelled it when she became ill. I thought that I wouldn't inhert the property if the life insurance had been cancelled, At least if the mortgage is in my name I have assets and my mother has more money to live her life.

elmer

Your mother doesn't receive Housing benefit, she will be claiming SMI from the DWP. That will stop when she no longer has a mortgage to pay, and she won't be able to claim Housing Benefit as she has previously owned the house.

Also as she is claiming SMI , it seems she may be claiming Pension Credit, so any capital that you give her may mean that she will no longer qualify
So although you can buy the house from your Mum you may make her financial situation much worse, advise her to speak to the CAB before you make any decisions that affect the benefits that she receives

elmer

Brock_and_Roll

And of course if the mother "gifts" the equity, then that is "deprivation of assets" and may result in her being denied means-tested benefits eg long term care down the line as and when she needs it.

lovinituk

emmasaunders70 wrote: »

I already give my mother the shortfall every month I am have no intention to "rip her off" I have been paying the mortgage for the last 6 years. She has no money to buy anything. At least if the mortgage was in my name it would be my responcability. My mother would never be able to get another mortgage so downsizing is out of the question and she loves her house she doesn't want to move.

If you're paying the shortfall for her, what is she doing with the rest of her money? Surely she would be worse off if she had to pay you rent? And why would she have to pay you rent if you already pay the shortfall?

It doesn't add up.

foxy-stoat

emmasaunders70 wrote: »

Why do you say 'for her sake I hope not' I am in no way trying to take advantage of my mother but just to get some advice on how to improve the situation we are both in at present. I am transferring money in to her account every month to cover the shortfall the housing benefit does not cover. She has no life insurance as she cancelled it when she became ill. I thought that I wouldn't inhert the property if the life insurance had been cancelled, At least if the mortgage is in my name I have assets and my mother has more money to live her life.

Because of the points raised.

She would lose her housing benefit, the rent you would have to charge should be at least 25% more than the mortgage you take out, if you can find one. It will be a higher rate than a residental mortgage so I dont see how you can save money on the mortgage, there will be legal and broker fees as well as stamp duty if over the threshold. You would have to declare the profit on the rental income and pay tax on it. She would also sold her property just to pay you rent on it so eventually she will be left with no money and no property.

You would be better off moving in with her and taking out a joint mortgage than trying to find a way to buy it off her and renting it back.