Buy a % of my mum's house

Gweeds

Last year myself and my partner moved into my mum's house with her moving into an annexe on the same plot. At the moment we pay my mum rent and the house we live in and the annexe are on the same title deeds and in her sole name. There is no mortgage against the property. We want to raise some money to convert the loft and we would like a stake in the property we live in. Mum suggested we buy the whole property from her but we simply can't afford to.

Is there a way we could buy a set % stake in the property by way of a mortgage? My mum is 70 and has lived here for the last 40 years, she has no intention of ever moving or selling and in her will I am the sole beneficiary for this property.

Our thinking is to buy say 50% now and then hopefully remortgage in a few years to raise the cash to convert the loft.

Is this possible?

sparky130a

Short of some convoluted accountancy, no.

A mortgage lender can hardly repossess half a house could they...

Cakeguts

So you raise a mortgage against this house that at present is mortgage free and then one of you becomes ill and the other loses their job and the house is repossessed. What happens to mum? Mum has paid off the mortgage in her house so that she can live in the house without worrying about becoming homeless and you want to make a 70 year old risk the chance of becoming homeless because you want to borrow against her house?

You have already got a free house. Your mum isn't going to evict you. Not content with being given somewhere to live that your mum has paid the mortgage off you now want to borrow money against it?

If you want a stake in a property that you live in. Buy one of your own and manage your own risk. People think that older people got property easy because it was cheap. Ask your mum what she had to go without to pay the mortgage on that house.

Gweeds

Woah!! Appreciate the answer may well be no... also you should appreciate that the full story isn't in these few paragraphs. In fact my partner and I have paid my mum's mortgage for the past 10 years since my dad passed away and we have sold our own house and moved into this one so that my mum can continue living here until she dies.we used the equity we raised to build the annexe and clear the last of my mum's mortgage! I didn't ask for a commentary on my family life, just for some advice on the practicalities / possibilities. At the moment we are a family of 6 living in a 4 bed... had it not been for our desire to make sure mum could continue to live here for the rest of her days, we'd have just bought a 5 bed!

leespot

Gweeds wrote: »

Woah!! Appreciate the answer may well be no... also you should appreciate that the full story isn't in these few paragraphs. In fact my partner and I have paid my mum's mortgage for the past 10 years since my dad passed away and we have sold our own house and moved into this one so that my mum can continue living here until she dies.we used the equity we raised to build the annexe and clear the last of my mum's mortgage! I didn't ask for a commentary on my family life, just for some advice on the practicalities / possibilities. At the moment we are a family of 6 living in a 4 bed... had it not been for our desire to make sure mum could continue to live here for the rest of her days, we'd have just bought a 5 bed!

If your mum becomes ill or needs full time care in a home, does she have any money to fund that? If not then those costs will be charged against the house, which will need to either be sold on her death to pay the charges or repaid by other means.

If you can't afford to purchase the house at full market value, then you cannot buy it otherwise deprivation of assets will become a major problem for you should your mum need care but she is unable to pay for it.

I'm not judging you one way or the other - just trying to answer your questions.

Cakeguts

Gweeds wrote: »

Woah!! Appreciate the answer may well be no... also you should appreciate that the full story isn't in these few paragraphs. In fact my partner and I have paid my mum's mortgage for the past 10 years since my dad passed away and we have sold our own house and moved into this one so that my mum can continue living here until she dies.we used the equity we raised to build the annexe and clear the last of my mum's mortgage! I didn't ask for a commentary on my family life, just for some advice on the practicalities / possibilities. At the moment we are a family of 6 living in a 4 bed... had it not been for our desire to make sure mum could continue to live here for the rest of her days, we'd have just bought a 5 bed!

I can only write an answer from what I read I can't read what you haven't written. It is great that you paid your mum's mortgage but that isn't really the same as borrowing money against the house at today's rates. Inflation over 40 years would mean that the mortgage repayments on borrowings of 50% of this house would be more than for the whole original mortgage?

If you are going to continue to live in this house you are going to have to make sure that you don't do anything to put mum at risk of becoming homeless. Taking out a mortgage against her house could do this and that makes paying her mortgage when your father died a waste of time because if the house is repossessed she will be forced to move.

Does the family of 6 include your mum? If not then do what lots of other people do get some bunk beds.

Mojisola

Gweeds wrote: »

At the moment we pay my mum rent

Gweeds wrote: »

you should appreciate that the full story isn't in these few paragraphs.

In fact my partner and I have paid my mum's mortgage for the past 10 years since my dad passed away and we have sold our own house and moved into this one so that my mum can continue living here until she dies.

we used the equity we raised to build the annexe and clear the last of my mum's mortgage!

If you don't give the important facts, you won't get relevant answers - the details in the follow-up post present a very different picture to you living in Mum's house and paying rent.

As you have paid the mortgage for years and then used a lump sum to clear it and paid to build the annex, you should have a loan agreement with your mother for that amount. You can put a charge on the house so that the loan has to be repaid when the house is sold - that will protect your investment for the future.

Gweeds

Thanks for the replies... sorry if I had a bit of a rant but I'm fed up of people assuming we're trying to somehow deprive my mother of something! The house had a valuation around 2013 and was valued at £675k, since then it's been modernised significantly and had a 1000sqft annexe added, so I would guess, with general price increases that it's around £750k to £800k which puts it well beyond us (when we were looking to up to a 5 bed our absolute top figure was £500k). We've spent around £200k on the annexe and modernising the main house. It was originally bought in the 1976 for £10k mortgage free and has been more than doubled in size since then. The first mortgage wasn't taken out until the early 90s when my dad's business was expanding and the extensions were mostly built.

Whilst I hadn't thought of paying for care in my mum's later years, she has 4 other properties which are rented out, they would be sold before her home to pay for care costs.

We could happily obtain a mortgage for around £400 to purchase 50% now, but short of paying a solicitor to tell us, I can't seem to find out if that's possible (regardless of the future ramifications / tax issues etc). Obviously if it's not possible there are no other considerations to take into account, if it is possible then we have to conside all those other factors. Really its a simple 'yes' or 'no' that were after in terms of the possibility... one thought I'd had was to set up a Ltd company with myself, my partner and my mum being directors and use this as the sole beneficiary of a trust in which the entire property is held. As I understand it, you can transfer the property ownership into a trust relatively easily.

What I don't know is if a bank would lend against the property with this kind of set up? I know doing it that way would be a commercial mortgage against the home as the asset. The trust would protect all of us in terms of a falling out or death / separation I think but I just don't know enough about it.

Cheers.

Gweeds

Thanks, we're not worried about our investment and the property won't be sold, certainly not until after my mum has died. So in that scenario I guess our 'investment' is protected as I'm the sole beneficiary in her will.

As mentioned, the question was just around the practicalities of purchasing 50% of a property and if it was possible or not, rather than other consideration we'd need to take into account. Once we know it is or isn't possible, we'd speak to our solicitor to get advice on the reality. I just begrudge paying a solicitor to just say 'no'!

Bob_Bank_Spanker_2

It isn't possible.

lincroft1710

Gweeds wrote: »

The house had a valuation around 2013 and was valued at £675k, since then it's been modernised significantly and had a 1000sqft annexe added, so I would guess, with general price increases that it's around £750k to £800k which puts it well beyond us (when we were looking to up to a 5 bed our absolute top figure was £500k).

Depending on the area, the house is probably now worth £900K plus, if you've modernised and added an annex the size of a 3 bed house