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Looking for advice please...
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mkbvd
Posts: 3 Newbie
My husband and I are moving back to the UK where I have secured a job. We want to buy our first family home with our two children but my salary does not allow us to get a large enough mortgage despite having saved up a substantial deposit.
My mum however has a property that she rents out and is willing to help. One option is for her to sell the property and then add our deposit to have enough to buy our house outright, and then pay my mum the equivalent of the rent she would have received for the rest of her life. However, understandably, she wants this to be legally binding. I just have three questions:
- How quickly could she then put the house in our name?
- What process could we go through to set up a legal contract where by we would pay her a set amount (that would go up with inflation) each month for her lifetime
- is there a better option that we have not thought about whereby we can buy our first home?
Thank you all for your help!
My mum however has a property that she rents out and is willing to help. One option is for her to sell the property and then add our deposit to have enough to buy our house outright, and then pay my mum the equivalent of the rent she would have received for the rest of her life. However, understandably, she wants this to be legally binding. I just have three questions:
- How quickly could she then put the house in our name?
- What process could we go through to set up a legal contract where by we would pay her a set amount (that would go up with inflation) each month for her lifetime
- is there a better option that we have not thought about whereby we can buy our first home?
Thank you all for your help!
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Comments
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- She would not be putting that house in your name? She would be selling it. Unless I am misunderstanding.
- Speak to a solicitor.
I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Seems like mom will hand over house but then they will pay mom the rent she is currently getting till mom passes? 🤷♀️Initial mortgage bal £487.5k, current £258k, target £243,750(halfway!)
Mortgage start date first week of July 2019,
Mortgage term 23yrs(end of June 2042🙇🏽♀️),Target is to pay it off in 10years(by 2030🥳).MFW#10 (2022/23 mfw#34)(2021 mfw#47)(2020 mfw#136)
£12K in 2021 #54 (in 2020 #148)
MFiT-T6#27
To save £100K in 48months start 01/07/2020 Achieved 30/05/2023 👯♀️
Am a single mom of 4.Do not wait to buy a property, Buy a property and wait. 🤓0 -
have you looked into the Nationwide stepping stone mortgage? Will this help?0
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Edit : helping hands not stepping stone0
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Unfortunately her house isn't suitable for our family with young kids so she would sell it and buy the new house with our additional money then pass it onto us. We would then essentially pay the rental income that she was getting from her home so that she still has her income. This is what we would like to set up legally. Is there a way of setting up a contract that states thay we will pay her 900 per month for the rest of her life?
And once she buys the house that will become our home how long would she have to wait before putting it in our name?
Thank you for the follow up questions.
I looked into the Nationwide mortgage but with my husband not bringing in a wage it still would not be enough in the area we will be living.1 -
How long though is the rest of her life as rentals need to go up with time due to inflation? You need to pay going rent I should hope? Setting it at £900 is not so ideal.Initial mortgage bal £487.5k, current £258k, target £243,750(halfway!)
Mortgage start date first week of July 2019,
Mortgage term 23yrs(end of June 2042🙇🏽♀️),Target is to pay it off in 10years(by 2030🥳).MFW#10 (2022/23 mfw#34)(2021 mfw#47)(2020 mfw#136)
£12K in 2021 #54 (in 2020 #148)
MFiT-T6#27
To save £100K in 48months start 01/07/2020 Achieved 30/05/2023 👯♀️
Am a single mom of 4.Do not wait to buy a property, Buy a property and wait. 🤓0 -
You could treat it as a loan, so that you are making repayments against the capital she has loaned to you. She could have a charge against the property to reflect that. Like that, the property would be in your name from the start so she wouldn't need to worry about capital gains tax or additional stamp duty.0
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We want the contract to include that it would go up with inflation each year. Just don't know what kind of contract we would need for this.Sistergold said:How long though is the rest of her life as rentals need to go up with time due to inflation? You need to pay going rent I should hope? Setting it at £900 is not so ideal.0 -
You have other complications.
She gifts you have a payback commitment gift with reservation.
Is that a real gift/payback or a contrived rental arrangement trying to avoid taxes
She loans you the money and you pay it back but with increasing amounts there will be exposure to tax depending how it is structured.
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