Mum wants to sign home over to me

AdrianC

Shnook wrote: »

...but it is her that wishes for us to live there...

So you don't actually want to?

Shnook

There are pros and cons to us living there but the main pro being that our children would each get their own bedrooms which now they are getting older is becoming a necessity. But I have told my mother over and over that the main reasons to do this is to make sure she is secure and happy. She said that for a long time now she has thought it would be a good option for my family to live there as she knows we need a bigger home and she no longer wants to live there so it solves a lot of problems for us all. It just depends on the loan company if they agree to a legal transfer of the house.

gettingtheresometime

I never understood this mentality that a house has to be kept 'in the family' which seems to be at the crux of the issue here.


It's nothing short of emotional blackmail

saajan_12

Shnook wrote: »

Yes my mum suffers with an illness but is not elderly and will hopefully not be having to think about care homes any time soon. -she may not be thinking about it soon, but the council would still look at prior deprivation of assets. No one can predict the future but her husband and myself and brother would care for her before we ever considered her going into a home the same way we did with my nan. - Even nan needed care in the end so not sure what you're trying to prove here..
We don't have all the figures yet but are currently trying to pull all this information together.
It is a secured loan my mum has on the house not a mortgage - doesn't make a difference, the lender has a charge on the property stopping it from being sold until loan repaid. we think there is around 10 years left on this loan with roughly Something between 20-30k left on the loan. - also check the repayment schedule, are there any charges / penalties for repaying early? With current house prices we think that the equity in the house would be somewhere between 50-60k. - so a house value of 80k? You'll also need a valuation & searches for the bank to lend you 20-30k to pay off mum's loan, costing a few £k
Our house needs to be valued which someone is doing today we could either walk away owing a few grand or break even I think we would be lucky to come away with much profit but it is a possibility. - don't forget EA fees, solicitors costs, removals.. budget £5k
My grandmother paid for her own care home fees and then late last year had to be sectioned which now means she is in a high dependency home and gets her care fees paid regardless of her income.
There is nothing to stop my mum registering with the council for a property it just depends what priority band they put her in. I have contacted the council to see where she would stand. - that's all well and good but being on the list doesn't mean she'll get anything, let alone a half decent place in a closeish area. I know someone who owns their own home and is on the council list for a property as she is selling her home as she struggles with the mortgage and upkeep of the house.- but they SOLD the property, rather than gifting it.. the sale proceeds will add to their savings and be taken into account when deciding whether they get a council property and if so, how much they have to contribute. You say they're only on the list, haven't got anything yet.

Shnook wrote: »

My nan discussed what she was doing with the council back then, my mum and brother and I where living in a 3 bed council house which the council saw as gaining that back when we moved into my nans house and where happy to give my nan a bungalow because of this. Yes that is all different now but that's what happened. - sounds strange, but economically the council were effectively getting back a 3 bed house for a smaller bungalow and changing over the tenant. This time they wouldn't be getting anything back as the house mum owns would be going to you who already own your own home. Completely different situs.
We will look into possibly buying the house from my mum once we have the figures all worked out as this may be the best or only option. It is a mine field and all just a possibility at the moment we are just trying to figure out options and what to do for the best.

Simply put, mum won't get a house to live in for free after giving away 50-60k equity.
She MAY get a council rental on which she pays rent, but how is this any better than loan payments on a home she owns?

Even if she did, you'd have to pay
20-30k loan
25-30k brother's equity share
5k valuation + solicitors costs + EA fees + removals
any shortfall in your house sale

Total 62.5k mortgage on a 80k house and that's assuming no negative equity.. can you afford that?

Mojisola

Shnook wrote: »

Hello yes we have read about this a little bit but my mum is only in her late 50s so won't be having to think about care homes for quite some time yet.

She is not doing it to afford care home costs in the future but as she no longer wants to be in the house and is struggling financially and wants my family to live in the house.

Deprivation of assets doesn't just apply to care home fees but all means tested benefits as well.

She can't give away capital in the form of a house and then expect to get benefits.

Shnook

The house doesn't have to be kept in the family but it was my grandmother's wish and a wish my mother now has too my nan bought thst house in 1961 when it was built and our family have been in it ever since. It would be sad to see it go but if that has to happen I am ok with that. There is no emotional blackmail.

From what information I have read it wouldn't be classed as deprivation of assets but as a legal transfer which if they choose the loan company can agree to if they wish. The council have said my mum can register with them but yes of course it depends on how they evaluate her situation to what priority they put her in. This we would have to look into if it all becomes an option.
The rent would be cheaper in a council property than her loan repayments she wouldn't have the stress of the loan anymore or the worry of paying for upkeep and repairs and she would get the fresh start she wants so might be a good option.
We won't be taking a loan to pay my brother as he is not wanting his share now and doesn't want us to take a loan to do so he would retain an interest in the property which would all be legally delt with. This is something he is happy to do as he doesn't want to live in the property but would like to keep it in the family if possible so we are all on board with the situation.

AdrianC

Shnook wrote: »

From what information I have read it wouldn't be classed as deprivation of assets

Your mother currently has a house with £60k in equity.
After this gift, she will have £0 in the bank, and no house.

How is that not depriving herself of assets?

We won't be taking a loan to pay my brother as he is not wanting his share now and doesn't want us to take a loan to do so he would retain an interest in the property which would all be legally delt with.

How?
A joint owner? Will he be on a joint borrower on the mortgage, too?
A second charge after the mortgage lender?

Shnook

It would only be deprivation if she was claiming housing benefit which she wouldn't. Even if she sells the house to pay the loan she will still need a council house and will pay rent either way, regardless if she walks away with money in her bank or not. She will have no house in both situations but at least if she signs the house over to us we benefit from it too.
My brothers name would be put on the deeds too so yes he would co own the house.

AdrianC

Shnook wrote: »

My brothers name would be put on the deeds too so yes he would co own the house.

So he's going to need to be on the mortgage, too.
At least his portion of the ownership is unlikely to trip over the +3% SDLT, because it's so small.

gettingtheresometime

Shnook wrote: »

We won't be taking a loan to pay my brother as he is not wanting his share now and doesn't want us to take a loan to do so he would retain an interest in the property which would all be legally delt with. This is something he is happy to do as he doesn't want to live in the property but would like to keep it in the family if possible so we are all on board with the situation.

Ok so let's imagine a scenario where by you somehow manage to move into this house with your brother retaining an interest.


His circumstances / wishes change and decides he wants to 'cash in' his interest. You can't afford to buy him out. What happens then?


This is such a bad plan for everyone concerned.