Parent moving in, contributing to cost of house, but don't want on mortgage, is there a way? 10 November 2022 at 6:05AM in Mortgages & endowments 15 replies 803 views

familywarrior

Hi all, I'm hoping you can help! I think this is a common question (and I have looked at past posts first!) Myself and my partner want to move to a bigger home, we also want his mum to move with us but to move into a separate building e.g. converted outhouse etc. We'd like to use the money from the sale of our current flat and her current home to give us the basis of our mortgage. However she is now 82 (a very healthy 82!) but 82 so herself and we would like her not to be on the new mortgage. But I just can't see how this would work e.g. using her money... any advice large or small to help us would be massively appreciated!  

Martin_the_Unjust

You might want to google ‘deprivation of assets’ as well especially as she is 82

penners324

She would have to gift you the money from the dake of her house. In writing.

However, there are Inheritance Tax and Deprivation of Assets issues (ie if she went into a care home, the Council can still consider that money as her's and thus request it be used to pay for the care home)

tacpot12

There might also be an issue with her own financial stability/safety. If you were to seperate from your partner, and she retained no financial interest in the new property, you could force a sale and you would be able to take half the proceeds; money that was morally hers. (We see plenty of requests for advice from seperating, unmarried couples on MSE, so it's difficult not to regard it as a possibility, even if you would never do such a thing.)

It would be much better if she could loan you both the money from the sale of her house, and you buy somewhere that didn't need a mortgage. The loan would secured on the house. Trying to juggle the lenders interest with three other people's is going to be difficult. She might need independent advice, especially as any such gift would leave her unable to get funding for care she might need if her health takes a turn for the worse.  

silvercar

Easiest way would be for her to sell her place and gift you the money for a deposit. You could separately document that she has done this and that the money is repayable on sale or whenever. 

Do you have siblings? If so, always best to discuss these sort of things openly.

simon_or

I don't know about the mortgage but about the rest -

Deprivation of assets - You situation is almost exactly the same as described in this article https://www.thisismoney.co.uk/money/pensions/article-6130445/Will-council-force-sell-house-cover-dads-care-bills.html except better as your mum is in good health. I've worked in this area previously and there's a huge lot of unnecessary scaremongering about it. For it to be considered doa, at the time of making the gift there has to be intention and a reasonable expectation that the person will need care. Not all elderly people go into long term care - estimates start from 1 in 4 (Dilnot commission) upwards and if your mum is currently in good health and able to manage her affairs independently, there's no reason to expect that she will go into long term care.

IHT - even if your mum had assets exceeding 325k IHT threshold, gifting them while she's alive can actually be a form of tax planning as it will reduce the amount of IHT payable upon death. If she lives for 7 years the gifted amount avoids it completely and if she dies within 7 years, you get proportionate taper relief.

K_S

familywarrior said:

Hi all, I'm hoping you can help! I think this is a common question (and I have looked at past posts first!) Myself and my partner want to move to a bigger home, we also want his mum to move with us but to move into a separate building e.g. converted outhouse etc. We'd like to use the money from the sale of our current flat and her current home to give us the basis of our mortgage. However she is now 82 (a very healthy 82!) but 82 so herself and we would like her not to be on the new mortgage. But I just can't see how this would work e.g. using her money... any advice large or small to help us would be massively appreciated!  

@familywarrior What you've outlined is not unusual and the mortgage part of it is fairly straightforward with the right lender.

What you need is a lender that allow non-borrowing adult occupiers and allows them to contribute to the deposit, and there are a decent number of mainstream lenders that will allow that. With most lenders (not all) your mother will need to sign an occupier's consent form but that would be the same even if your spouse weren't on the mortgage.

Edit: The above doesn't factor in the criteria about the annex/outhouse/outbuildings as that adds an additional level of complexity depending on the details and the specific lender policy.

kingstreet

K_S said:

familywarrior said:

Hi all, I'm hoping you can help! I think this is a common question (and I have looked at past posts first!) Myself and my partner want to move to a bigger home, we also want his mum to move with us but to move into a separate building e.g. converted outhouse etc. We'd like to use the money from the sale of our current flat and her current home to give us the basis of our mortgage. However she is now 82 (a very healthy 82!) but 82 so herself and we would like her not to be on the new mortgage. But I just can't see how this would work e.g. using her money... any advice large or small to help us would be massively appreciated!  

@familywarrior What you've outlined is not unusual and the mortgage part of it is fairly straightforward with the right lender.

What you need is a lender that allow non-borrowing adult occupiers and allows them to contribute to the deposit, and there are a decent number of mainstream lenders that will allow that. With most lenders (not all) your mother will need to sign an occupier's consent form but that would be the same even if your spouse weren't on the mortgage.

+ the annexe K_S!

K_S

kingstreet said:

K_S said:

familywarrior said:

Hi all, I'm hoping you can help! I think this is a common question (and I have looked at past posts first!) Myself and my partner want to move to a bigger home, we also want his mum to move with us but to move into a separate building e.g. converted outhouse etc. We'd like to use the money from the sale of our current flat and her current home to give us the basis of our mortgage. However she is now 82 (a very healthy 82!) but 82 so herself and we would like her not to be on the new mortgage. But I just can't see how this would work e.g. using her money... any advice large or small to help us would be massively appreciated!  

@familywarrior What you've outlined is not unusual and the mortgage part of it is fairly straightforward with the right lender.

What you need is a lender that allow non-borrowing adult occupiers and allows them to contribute to the deposit, and there are a decent number of mainstream lenders that will allow that. With most lenders (not all) your mother will need to sign an occupier's consent form but that would be the same even if your spouse weren't on the mortgage.

+ the annexe K_S!

@kingstreet You're right, completely ignored that part!

Exodi

familywarrior said:

Hi all, I'm hoping you can help! I think this is a common question (and I have looked at past posts first!) Myself and my partner want to move to a bigger home, we also want his mum to move with us but to move into a separate building e.g. converted outhouse etc. We'd like to use the money from the sale of our current flat and her current home to give us the basis of our mortgage. However she is now 82 (a very healthy 82!) but 82 so herself and we would like her not to be on the new mortgage. But I just can't see how this would work e.g. using her money... any advice large or small to help us would be massively appreciated!  

If you could come back to this thread, could you confirm that both she and yourslves would like her not to be on the new mortgage and not to be on the deeds also? I think most (myself included) assume you mean that she'd be on neither, effectively gifting you the money, but it's always good to be sure.

Outside of the potential DoA issue that was raised, it should be fully considered whether this is in her best interests - and all eventualities should be considered.

I refer you to tacpot12's post -

tacpot12 said:

There might also be an issue with her own financial stability/safety. If you were to seperate from your partner, and she retained no financial interest in the new property, you could force a sale and you would be able to take half the proceeds; money that was morally hers. (We see plenty of requests for advice from seperating, unmarried couples on MSE, so it's difficult not to regard it as a possibility, even if you would never do such a thing.)

No-one that is planning to buy a house together is planning on breaking up, but people do break up.

If you are married, or got married (or even if you don't, but she contributes towards the mortgage), the mothers gift, which is likely just an early inheritance to her child in disguise, would be split in half against the mothers potential wishes.

diystarter7

penners324 said:

She would have to gift you the money from the dake of her house. In writing.

However, there are Inheritance Tax and Deprivation of Assets issues (ie if she went into a care home, the Council can still consider that money as her's and thus request it be used to pay for the care home)

What I would have posted, thanks.
I'll add that if you go ahead OP and do what your are thinking about, your mum may fall out with you, your OH or want to move somewhere else, what will happen then? We have a few people in our road over 90, most drive and or walk long distances to a shop and back with the help of a trolley to carry shopping so what I am saying she could change her mind what do you do then?


Re the deprivation of assets, if she is in good health, no reason why he can't live at least another 12/14 years as women often outlive men and just in case she does not, who was to know what was around the corner - therefore deprivation of assets is a difficult one - possibly consult the duty social worker re dep of assets without giving your details.


Via work when I worked a few times a year I'd seen where a parent the other deceased sold up and moved in with one of their children and family - it rarely worked out. Living seprately has a better chance of a good outcome but better still is you move into a property near her or she does and could be an apartment for the older group - 


Your choice and good luck