Buying a house with Mum

elsien

Is anyone able to give more advice about the OPs original question which is, presuming they have thought about all the points referenced above, can they get a mortgage without Mum’s name needing to be on it If she is a part owner of the house? 

RHemmings

bobster2 said:

RHemmings said:

I note the mention of deprivation of assets by @Jemma01 above. Clarification by the OP indicates that the OP's mum will not lose any personal assets, except that OP's mum's assets will be changed to be one third of a more expensive property instead of all of a cheaper property. 

In terms of paying for care costs in the future, I believe that a house where the person needing care resides but where there are other relatives living cannot be forced to be sold to pay for care-home fees, and that the value of that home cannot be included in calculations for how much the person needing care should pay for that care. https://www.ageuk.org.uk/information-advice/care/paying-for-care/paying-for-a-care-home/deprivation-of-assets/ 

However, if a ‘qualifying relative’ also lives in the property or it is classed as their ‘main home’ even if they don’t live there all the time, then the value of the property cannot be included in the financial assessment and it cannot be sold to pay for care home fees.

Not all relatives are "qualifying relatives". Adult children under 60 who are not disabled would not count as "qualifying relatives" - so the house could be included in a financial assessment for care fees... See page 7... https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs38_property_and_paying_for_residential_care_fcs.pdf

Yes, I was over-optimistic about qualifying relatives and didn't check properly. (One reason why I left my reply for this morning). I note from that link that even young children have to be young children of the person going into care who owns the house. No mention or allowance that I can see for (e.g.) grandchildren. 

Going all the way back to @Jemma01's post, from what I can see now, co-owning a house with an elderly relative who may later go into care has the risk that the council may come after the elderly relative's part of the house to pay for care fees.

From my earlier links, there are solutions to this. E.g. remortgaging that part of the house to buy out the elderly parent, various forms of equity withdrawal, etc., to pay for care. But, it does have to be taken seriously. If the elderly parent went into care and the children couldn't afford to take over the parent's part ownership of the house, that could be messy. Note: The OP here has said that they were planning to care for their parent at home - so maybe this doesn't apply. Unless care needs become more complex than can be provided for at home. 

Albermarle

Browntoa said:

As above, "mandatory disregard" is mainly expected to be a surviving spouse or partner . The only exception would be a sufficiently disabled relative ( itself depending on evaluation by the local council) 

Sheltered accommodation nearby for her is a much better option and a cash gift used to assist your purchase if still needed or purely as a gift ( subject to the 7 year tax tapering) .

A cash gift from Mum only causes any IHT issues, if her estate is likely to be big enough to be subject to IHT in the first place.
If that was the case then if she died within 7 years, then 100% of the gift would be counted back in to IHT calculations. Tapering only applies in a very small number of cases, mainly where the gift is very large ( > £325K) 

propertyrental

elsien said:

Is anyone able to give more advice about the OPs original question which is, presuming they have thought about all the points referenced above, can they get a mortgage without Mum’s name needing to be on it If she is a part owner of the house? 

OP/mum really needs to speak to a mortgage broker for up-to-date policies of all lenders.

But my out of date understanding is that it's unlikely. In the event of mortgage arrears/default, the lender would want to repossess, and that's all but impossible if there is a joint owner who is not on the mortgage and hence who has not themselves defaulted.

Brie

elsien said:

Is anyone able to give more advice about the OPs original question which is, presuming they have thought about all the points referenced above, can they get a mortgage without Mum’s name needing to be on it If she is a part owner of the house? 

We were told no 5 years back when we did this.  MiL sold her place and gifted us a large sum that enabled us to buy a place suitable for her as well as us with only my OH & I on the deeds or mortgage.  When she needed care we were told that the house needed to be sold due to deprivation of assets until the council realised I was already over 60.  So they said a lien would be put on the house instead to recover costs.  Ultimately it wasn't required.

But do consider this carefully - looking after someone 24/7 is difficult, particularly if you also have children that you are also looking after.  We were unable to have a holiday by ourselves for all the time MiL was with us as there was no one else available to care for her in our absence.

km1500

elsien said:

Is anyone able to give more advice about the OPs original question which is, presuming they have thought about all the points referenced above, can they get a mortgage without Mum’s name needing to be on it If she is a part owner of the house? 

if she is part owner in the house than they should structure it so that they are tenants in common and then it is certainly true that tenants in common can and always could get separate mortgages for their share of the house

propertyrental

km1500 said:

elsien said:

Is anyone able to give more advice about the OPs original question which is, presuming they have thought about all the points referenced above, can they get a mortgage without Mum’s name needing to be on it If she is a part owner of the house? 

if she is part owner in the house than they should structure it so that they are tenants in common and then it is certainly true that tenants in common can and always could get separate mortgages for their share of the house

If true, I stand corrected.

But I strongly suspect not true.

user1977

propertyrental said:

km1500 said:

elsien said:

Is anyone able to give more advice about the OPs original question which is, presuming they have thought about all the points referenced above, can they get a mortgage without Mum’s name needing to be on it If she is a part owner of the house? 

if she is part owner in the house than they should structure it so that they are tenants in common and then it is certainly true that tenants in common can and always could get separate mortgages for their share of the house

If true, I stand corrected.

But I strongly suspect not true.

Indeed. How on earth would repossession work? The lender will want possession of the whole property - the only way they can do that is by all the owners signing the charge.

Which of the owners are liable to repay the loan is another question, but even if mum is not "on the mortgage", she would have to sign the deed in order to agree to her interest in the property being repossessed if the kids default on the repayments.

Hoenir

km1500 said:

elsien said:

Is anyone able to give more advice about the OPs original question which is, presuming they have thought about all the points referenced above, can they get a mortgage without Mum’s name needing to be on it If she is a part owner of the house? 

if she is part owner in the house than they should structure it so that they are tenants in common and then it is certainly true that tenants in common can and always could get separate mortgages for their share of the house

A mainstream lender will require first charge on the property. The division of the capital value value of the property is of no interest to a mortgage lender. Their only interests are to ensure that property is suitable security for the money being advanced and that that they are unobstructed from reposssessing the property if the need were to arise. 

A family member having a financial interest in the property wthout being on the mortgage is more than likely a non starter. Simply too many complexities to make it worth the bother. 

NoAngel

Thanks for the replies.
I have to say that I’m still confused and it doesn’t sound straightforward at all. I suspect that if my husband and I were also cash buyers it may be more straightforward.
Just to clarify that my Mum has no care needs currently. We don’t need her money, we are already in a house that meets our needs. It just wouldn’t accommodate her as well so rather than her buying a tiny flat near us, we thought a larger house would mean more company for her (and childcare for us although she has always helped a lot with our children) and ultimately we could be there to care for her if needed although I realise from personal experience that sometimes care/nursing homes are necessary. 

I’ve suggested to her that she speaks to a solicitor for some advice and I will speak to our mortgage broker. If it’s all too complicated then we will look at flats for her instead.