Right to buy scheme

miike101

Hi all. My mother has always wanted to own her own home. She’s lived in the same council house for 45yrs. She would get a substantial discount under the Right to buy scheme.
If I wanted to Gift/Loan her the money (£28k) is that ok? Would I be best gifting it or loaning it ( knowing I wouldn’t get it back 😂). 

_Penny_Dreadful

miike101 said:

Hi all. My mother has always wanted to own her own home. She’s lived in the same council house for 45yrs. She would get a substantial discount under the Right to buy scheme.
If I wanted to Gift/Loan her the money (£28k) is that ok? Would I be best gifting it or loaning it ( knowing I wouldn’t get it back 😂). 

Why wouldn't it be?  You could do either, make an outright gift or you could lend your mum the money and place a second charge (the council will initially have the first charge for the first 5 years I think) against the title to secure your loan.  Can your mum afford to maintain the property once she becomes the owner?

Bookworm105

will she need a mortgage or will your money account in full for the small amount she has to pay?
interesting that her want coincides with your now near impending inheritance.

it has to be a gift, not a loan otherwise the mortgage company will reduce the size of their loan

if on the other hand she is now too old to get a mortgage of her own, then it matters not how you describe it, you'll shortly get the money back anyway 

elsien

Unless it needs to be used  to pay for care.
Has she thought about the ongoing maintenance costs that she will now be liable for?

Jemma01

Are you the only child? If so it's probably not a problem. If you have siblings and other people who would share the inheritance, then you want to note it as loan that's only due if the house is sold. So your mum won't have to pay unless she decides to sell or she passes away and the house is sold. (Don't know how the lender will view this)

miike101

Jemma01 said:

Are you the only child? If so it's probably not a problem. If you have siblings and other people who would share the inheritance, then you want to note it as loan that's only due if the house is sold. So your mum won't have to pay unless she decides to sell or she passes away and the house is sold. (Don't know how the lender will view this)

I’m not the only child but I’m am the only one with the means of helping my mum out. Putting it in place so I’d get my money back if sold seems to be the way

miike101

Bookworm105 said:

will she need a mortgage or will your money account in full for the small amount she has to pay?
interesting that her want coincides with your now near impending inheritance.

it has to be a gift, not a loan otherwise the mortgage company will reduce the size of their loan

if on the other hand she is now too old to get a mortgage of her own, then it matters not how you describe it, you'll shortly get the money back anyway 

She wont get a morgage because of he age. I will be buying the house in full for her (so not morgage involved). If I end up inheriting the house through the passing of my mother(hopefully not for a long time yet) so be it. It was our family home for the past 45 years so it wouldnt be getting sold. As for the cost of maintaining it, she will be fine.

tacpot12

Do you have any siblings? My father lend his mother the money to buy her council house under the Right to Buy scheme, and put a second charge on the home. The loan was arranged via a solicitor and included interest at a low rate. Athough he asked his siblings whether they wanted to all contribute/join in, none of them did, but one kicked off when his mother died and most of the value of the house went to my father!