Buying aunties share of Grandmas Home

moosel

Hello,
I'll try and keep this short, I wasn't sure if I should put this here in mortgages!

At the moment I live in my grandmas house. It is currently on the market. We moved in after the house was empty for 3 years until we moved rent free in under the agreement we modernise the house. We have since put a new kitchen in, bathroom, carpets, rewire ect. We have started to think about purchasing the house as it still needs loads of work isn't shifting.

The house is 50:50 split between my auntie and my mother. My mother has offered me her half of the house.

Whats our best option here? Would we be able to borrow the full amount of the house value as a mortgage if we are only purchasing the house for 50% of the value? Or would we need to get a mortgage and an additional loan?

I have changed the wording here to make it easier to understand

missbiggles1

moosel wrote: »

Hello,
I'll try and keep this short, I wasn't sure if I should put this here in mortgages!

At the moment I live in my grandmas house, rent free. It is currently on the market. We moved in after the house was empty for 3 years to look after it and to be in for when people come to view the house. We have since started modernising the house and have started to think about purchasing.

The house is 50:50 split between my auntie and my mother. My mother has offered me her half of the house for free.

The house is currently on the market for £69,995 but next door sold for 52k so I think the house is currently over valued.

We would like to pay no more than 25k for my aunties share as we would need an additional 20k to extend the house and get it to how we want it.

Whats our best option here? Would we be able to borrow the full amount of the house value as a mortgage if we are only purchasing the house for 25k? Or would we need to get a 25k mortgage and an additional loan?

Lastd thing! how does my mother "gift me' her share? Would the house offer go to both of them and she would accept also?

Sorry if this sounds really stupid its our first home and have no idea on buying /mortgages!

Why would you want to cheat your aunt out of a large chunk of the property's value when you're already living there rent free?

theartfullodger

What a charming generous plan you have!

To gain aunt's confidence & establish yourself as a decent honourable person suggest you cough up the market rent you fairly should have been paying since you moved in & pay to aunt & mum.

Are you sure you are getting all the benefits you could be? What are you currently in receipt of, please?

Clearly no troll....

moosel

I'm not in receipt of any benefits - I work full time.

I think you all have me wrong here. We don't pay rent as we have an agreement . (We have put in a new bathroom/kitchen to try and help sell the house) We pay all bills ect and didn't plan to live here more than a year or until the house was sold.

I'm not trying to cheat anyone, my mum and auntie want nothing to do with the house. The house has been on the market for years and noone will touch it. I'm offering my auntie the full amount for her 50% share and my mum would pass her share or the cash on to me regardless?

Am I wrong?

moosel

missbiggles1 wrote: »

Why would you want to cheat your aunt out of a large chunk of the property's value when you're already living there rent free?

I'm not trying to cheat her out of any money, if the house is valued at 80k i'm more than happy to give her the 50% which shes due.

They couldn't rent it out in the state it was in and neither my mum or auntie were prepared to do any work on the house.

LKRDN_Morgan

moosel wrote: »

I'm not in receipt of any benefits - I work full time.

I think you all have me wrong here. We don't pay rent as we have an agreement . (We have put in a new bathroom/kitchen to try and help sell the house) We pay all bills ect and didn't plan to live here more than a year or until the house was sold.

I'm not trying to cheat anyone, my mum and auntie want nothing to do with the house. The house has been on the market for years and noone will touch it. I'm offering my auntie the full amount for her 50% share and my mum would pass her share or the cash on to me regardless?

Am I wrong?

It's your wanting to buy it for no-more than 25k comment that gives that impression.
Has your auntie said what she's willing to sell for?

moosel

LKRDN_Morgan wrote: »

It's your wanting to buy it for no-more than 25k comment that gives that impression.
Has your auntie said what she's willing to sell for?

Ah I see, I've just re-read it and changed the wording a little. I was just trying to write matter of factly so people didn't have to read aload of gobble.

No not yet we haven't even spoken about it. I was asking regarding a mortgage/buying on here first to see if we could afford to even think about buying before we spoke to anyone.

But it seems im robbing my family blind!

-taff

You should be able to get a mortgage for paying her and any additional works if your mother gifts you her half, because the house will be entirely owned by you and worth more than the mortgage you're after. [She just gifts it to you via a solictor, she doesn't need to accept a sales offer, but you will need that paperwork before you go for a mortgage to prove you own it - or have it being processed at least]

Not sure how it works out for tax purposes for your mother since she's depriving herself of assets, and I have no idea about CGT but someone will be along soon....

DigForVictory

Can't see any problem with buying out Auntie, subject to all the usual paperwork.
However, foresee a stack of woe with potential Deprivation of Assets & your mum. She, in her love & generosity, may not have thought that bit through completely.

moosel

Thank you for the responses, I'm going to have a look into Deprivation of Assets for my mum. We've already said to her we're not happy taking her share but theres some history I wont go into which means she really she wants doesn't want anything from the sale. I'll try and round everyone up and make them talk about it. Shes only just turned 50 - from a quick google Deprivation of Assets looks like its to do with state funded care? I'll keep googling.

G_M

This does not sound like grandma's house at all. If mum owns 50%, and auntie owns 50%, how much does grandma own? My maths is not very good.

I hope mum and grandma are both doing HMRC tax returns, and compying with all other landlord leglislation.

we moved rent free in under the agreement we modernise the house. We have since put a new kitchen in, bathroom, carpets, rewire ect.

You may not be paying rent in cash, but you are certainly paying rent! And there is an agreement that you do so. What is the value of the kitchen bathroom etc.......?

If you wish to buy the property, or part of the property, then there is no reason you can't, provided

a) the seller is willing to sell
(whether that is your mum selling 50%, your aunt selling 50%, or mum and aunt selling (or gifting) 100% between them)
b) you can agree a price
c) you have the cash
d) you can raise suficient mortgage (bearing in mind any lender is unlikely to lend on half a property - how could they repossess and sell if you defaulted on repayments?)
e) the seller (mum and/or aunt) understand the Capital Gains Tax implications