One Mum, Two Adults, one House with Annex

[Deleted User]

felixns said:

Hi Everyone!
I'm in the early stages of buying a property with an Annex with my Mum and lovely girlfriend.
My mum is selling her place and it should raise around £565,000.
I own a flat worth around £168,000 = I owns around £40k of the place,
My Girlfriend owns a flat (which she rents out) worth around £175,000 = Owns around £40k of the place,
I have recently become self employed and am not earning huge amounts, but my GF has a well paid job.
So....
We are trying to weigh up the best option to move forward here are our options as I see them do we;
Inheritance; when my mum passes, my sister will want a cut 50% of the property we buy.
A,
Mum buys a House outright.
We pay her back, over time.
I have to sell my place as I cannot get a buy to let mortgage currently.
My GF carries on renting out her place.
B,
Mum buys a House outright.
We pay her back, over time.
I have to sell my place as I cannot get a buy to let mortgage currently. (I give the 40k to my mum)
My GF sells her place too.
She then uses the 40K for a buy to let mortgage on a place where she can make a decent profit each month, this goes towards paying back my mum.
C,
Mum sells here house & "gifts" 560k to my GF. My GF then gets another mortgage so that we can buy a house worth 650k, (she can afford to do this)
We pay Mum back the difference, over time.
I have to sell my place as I cannot get a buy to let mortgage currently. (I give the 40k to my mum)
D,
Mum buys a House outright.
We pay her back, over time.
I sell my place to my GF somehow so I can rent it out.
My GF carries on renting out her place.

There's probably a load more options I hadn't thought of yet!
Help!
Felix

I can’t see any mortgage lender agreeing to C. Who will be the legal and beneficial owners in A, B and D as the suggestion appears to be a private mortgage between your mum and you and your girlfriend. Why would your mum even bother with these options instead of keeping and equity gain, or potential loss, to herself? 

In A,C and D I think the higher rate of SDLT will apply because your girlfriend will keep her BTL. 

lesalanos

felixns said:

lesalanos said:

Why can't you get a BTL?

I'm not earning enough currently, setting up to businesses at the very early stages...

Find a lender who doesn't require proof of income.  There are plenty of options.
I used post office mortgages(bank of Ireland)last year for my 2 btl mortgages 

md258

If I was your GF, I wouldn't want to buy with my MIL, when both the OP and GF owned their own places. What is the reason for wanting this particular move, rather than Mother downsizing and then gifting the left over money to the OP (and siblings). Is this the house you plan to live in forever?

If you do go ahead, make sure you've thought through (and written down):
- what happens if OP and GF split
- what happens if GF and MIL don't get on
- what happens if someone dies
- what happens if someone wants out
- what happens if M needs care and you don't like the council funded option
- what happens if someone is bankrupt
- what happens if M lives to be 105. Will OP and family be happy living there in your 80s?

NinjaTune

I don't understand why your Mum would gift a huge amount of money to your girlfriend instead of you; seems a bit risky.  How much is the cost of property you are proposing to buy?  

dimbo61

Could you buy together and with an offset mortgage from YBS.
Mum could keep her savings in Her offset account !
Mum and You/G/F Putting down equal deposits and you and your g/f getting a mortgage.
Mum can then tap into her savings or gift regular payments £3,000 a year to your sister and use her money to enjoy life/holidays etc.

oldbikebloke

dimbo61 said:

Mum and You/G/F Putting down equal deposits and you and your g/f getting a mortgage.

if mum is living in the property not sure the lender will allow a mortgage she is not party to, whilst occupying the house it is secured on, and in which she owns a stake via her deposit.

Sistergold

Dear OP, why are you thinking of doing this to your mom? Relationships are unpredictable and you are now handing over your moms estate to your now girlfriend on a silver platter? You and your girlfriend should do your own thing, leave your mom to manage and keep her money while she is still alive! Most arrangements which start well don’t end well! Since your “girlfriend earns well” you both have £40k you can both use that as deposit and get a mortgage based on your GF’s earnings to which you will then contribute repayments as agreed! 

felixns

Hi everyone, thanks for all your great feedback and advice. So many responses, not enough time to reply to them all one by one...
We are doing this as my mum is getting older, and we want to be able to keep an eye on her as she ages.
We are aware there are lots of unknowns and things we need to think about, and plan to seek advice on all these matters.

The main question however remains;
What's our best option as far as buying a place together?
Perhaps I laid out two many options for people to look at.
Ignore my wild option of gifting a load of money to my GF, I was just trying to think of all the possibilities.

Our main aim would be;
Owning a house together, that we have no mortgage on.
We Pay my mum a monthly amount of money (effectively slowly buying back the house from her), which she lives off along with her pensions etc.
Then we also rent out another property, which makes a profit every month, which then can subsidise the money we pay to my mum.
Our living expenses then become less each month.
Thoughts?
Thanks again for all your help,
Felix

Aranyani

How old is everybody?

[Deleted User]

felixns said:

Hi everyone, thanks for all your great feedback and advice. So many responses, not enough time to reply to them all one by one...
We are doing this as my mum is getting older, and we want to be able to keep an eye on her as she ages.
We are aware there are lots of unknowns and things we need to think about, and plan to seek advice on all these matters.

The main question however remains;
What's our best option as far as buying a place together?
Perhaps I laid out two many options for people to look at.
Ignore my wild option of gifting a load of money to my GF, I was just trying to think of all the possibilities.

Our main aim would be;
Owning a house together, that we have no mortgage on.
We Pay my mum a monthly amount of money (effectively slowly buying back the house from her), which she lives off along with her pensions etc.
Then we also rent out another property, which makes a profit every month, which then can subsidise the money we pay to my mum.
Our living expenses then become less each month.
Thoughts?
Thanks again for all your help,
Felix

You could all be tenants in common from the get-go with whichever split you want with your mum securing her loan to you against your and your GF's shares.  You should have a Deed of Trust drawn up stating what will happen in the event of relationship breakdowns.

How much profit do you expect to make on the rental property? How long will it take to pay your mum back for your shares of the property?  How does your sister feels about this and has your mum considered the consequences to your sister's inheritance?  I realise that no one has a god given right to inheritance and that if your mum doesn't want to leave your sister anything that's fine just like she could leave nothing to you either but it's perhaps something she might want to have a good think about.