buying mums house

colin1096

i went to the bank to get a mortgage to buy my mums house at market value so i can continue living there if any thing happens to my mum . I was buying the house for £ 120.000 the house is worth £160.000 but with my inheritance from my mum of 40k would reduce the amount . The other 120k my mum would recieve would go 3 ways too my 2 brothers and sister 40k each . The halifax firstly agreed to the mortgage but then said no when they realized my mum was 77 and was going to continue living with me .

So what i want to try and do now is i have 100k savings and me and my partner are going to get a loan of 20k give that to my mum so she can then gift my brothers and sisters and get a solicitor to put the house in my name . i know about the 7 year rule but my mum is in good health and if anything were to happen to her i aswell as my sisters and brothers would take care of her . I was wondering if this is a complex process and what would be the best way to go about this . My mum has no will in place as we all knew that when she passes that everything would go 4 ways . \i am nearly 40 and have always lived with my mum and want to get on the property ladder .

Thanks in advance

Jane_B

If this does go ahead, I would urge you to get your mother to write a will, everyone knowing it goes 4 ways isn't good enough, and unfortunately these situations bring the worst out of people.

Brock_and_Roll

Also need to bear in mind that the 7 year rule does not apply to Deprivation of Assets for the purposes of care funding.

Mojisola

colin1096 wrote: »

my mum is in good health and if anything were to happen to her i as well as my sisters and brothers would take care of her .

Brock_and_Roll wrote: »

Also need to bear in mind that the 7 year rule does not apply to Deprivation of Assets for the purposes of care funding.

With the best will in the world, you don't know what the future will bring and what your mother's care needs will be.

xylophone

You have obtained a full market valuation of the property at £160,000 from a qualified RICS surveyor?

You propose (in effect) buying the house from your mother at undervalue and for your mother to gift the proceeds immediately to your siblings?

(Trying to present this as a "gift" from you to your mother won't wash in these circumstances - you are reserving a benefit by requiring her to "gift" you the property).

Your mother would be left with no house and no savings?

In the event that your mother did require care, the LA would certainly be considering whether she had deliberately deprived herself of assets/capital.

http://www.whentheygetolder.co.uk/care-fees-funding-and-deprivation-of-assets-the-rules/

You say that your mother is in good health but she is 77 years old and she is not "living independently" since you are living with her.

The LA could be inclined to take a robust view of the circumstances.

G_M

This is a mad idea.

Recommend your mum to write a will.

Why deprive her now?

AdrianC

colin1096 wrote: »

i went to the bank to get a mortgage to buy my mums house at market value...
I was buying the house for £ 120.000 the house is worth £160.000

I make that £40k under market value.

but with my inheritance from my mum of 40k would reduce the amount

You haven't inherited anything. She isn't dead yet. When she does die, how do you know she'll leave £160k behind?

The other 120k my mum would receive would go 3 ways too my 2 brothers and sister 40k each

Now?

So you would be buying this £160k property with a £40k gifted deposit... and your mother would promptly be giving her remaining £120k assets away?

The halifax firstly agreed to the mortgage

You mean a £120k decision-in-principle? Great. So if you find the right property, they'll lend you that on top of your deposit.

but then said no when they realized my mum was 77 and was going to continue living with me .

Was your mother going to remain part owner?

So what i want to try and do now is i have 100k savings and me and my partner are going to get a loan of 20k give that to my mum so she can then gift my brothers and sisters and get a solicitor to put the house in my name

OK...

i know about the 7 year rule

£160k estate is nowhere near IHT threshold, so seven years is irrelevant. Deprivation of assets is what you need to be googling. She has £160k. She would be giving £160k away. You would then be expecting the council tax payers of your area to pay for any care she needed.

but my mum is in good health and if anything were to happen to her i aswell as my sisters and brothers would take care of her

24x7 full nursing care for somebody with complex physical needs, doubly incontinent, aggressive from dementia, and who doesn't even know who you are?

It's easy to say...

My mum has no will in place as we all knew that when she passes that everything would go 4 ways

A will is easy to get done, but the intestacy rules would do that anyway - so long as she doesn't have a long-gone-but-not-divorced spouse or any other children you've not mentioned... If there are, then they come into the intestacy equation, too, no matter what you "all know".

i am nearly 40 and have always lived with my mum and want to get on the property ladder .

You have £100k in savings and a £120k decision-in-principle, and live in an area where you'd be happy to live in a £160k property. What's stopping you...? Only that you're nearly 40, but have never left home.

G_M

I wish mum was on the forum posing questions.....

I increasingly feel she is being taken for a ride by her children who want their inheritance early with no thought of mum's own needs and future.

FBaby

I wish mum was on the forum posing questions.....

Indeed, she's got nothing to gain from this. OP seems to think the house is his because he's lived in it for all those years. I wonder how much he has contributed to half of everything to make such a claim.

OP, why should your mum put herself at risk just because you haven't been able to get on the property ladder so far? Do you still think, at 40, that she should be putting your best interests before hers?

Pixie5740

You might "know about the 7 year rule" but it won't apply in your case since your mother will continue to live in the property with you after gifting you £40k of equity. The 7 year rule also doesn't apply when it comes to deprivation of assets. There is no time limit on how far back the council can go should your mum need to pay for care in the future.