How to afford a mortgage to move back into my house!

EmmaL

Hi - I have a house I've owned for 10 years. It's been rented out for the last 7 years and my daughter and I (I'm a solo parent) have been living with my mum.

Five years ago I took out a buy-to-let mortgage and borrowed extra money to extend my mum's house (yes yes I now realise this was a BAD idea as I've essentially trapped myself, but it's done, I need help finding a way out 🙏) My mum did adjust her will accordingly so that on her death I will inherit 60% of her house and my brother will get 40% - unless it all gets spent on care if she needs it.

Now that my daughter is a teenager us all living together is no longer working, in fact it's a nightmare. I'm sure we are making my mum's life hell, but she would never admit it.

I'd like us to move back to our house. However as I work part-time and am on a one year contract, I can't afford to get a residential mortgage on my house, partly because of the extra amount I borrowed to invest in my mum's house.

So what are my options? I've suggested to my mum that she downsize as this house would be too much for her on her own, and this would enable me to get my capital as well - however, she doesn't want to do that, and that's fair enough.

What are the other options? Could she be a guarantor on a mortgage for me? Or could she apply jointly with me? She's 81 so I suspect neither of these would work.

Is equity release the only answer? I've always suggested she steer clear of that as it's so expensive, but is there any other choice? 

Thank you!

elsien

I do realise this is easier said than done, but can you not look for a full-time job that might make a mortgage more affordable? 

Just because you are asking about other options, and this is one.

no written agreement with Mum, I take it?

ACG

The 1 year contract can probably be overcome, but the income on the contract needs to be there. 
If its not, then your options are to sell your home and buy a cheaper one, mum downsizes or equity release. 

EmmaL

elsien said:

I do realise this is easier said than done, but can you not look for a full-time job that might make a mortgage more affordable? 

Just because you are asking about other options, and this is one.

no written agreement with Mum, I take it?

Thank you. Yes, sorry I should have added that I have the added complication that my daughter is home educated, and going back to school isn't an option, so part of the reason for being part-time is that I need to be around for her or in a VERY flexible job. So it's an option, but probably not an ideal one...

And no. there's no written agreement with my mum as such, aside from her will. Perhaps we need to have something in writing re getting my investment back plus my share of the increase in property value should she need to sell to pay for care?

elsien

You may need to get some advice around that - if mum is older and depending on her health, you would have to be careful that this would not be seen as deprivation of assets with regards to care costs.
 In this case the primary reason would not appear to be to avoid care costs. so you have a good argument to refute that but you would probably need to properly be able evidence that you have put money in and that it was not intended to be a gift to her and ideally that it was done when she was in good health and care costs were not reasonably foreseeable. 

Deprivation of Assets in Social Care | Age UK

EmmaL

elsien said:

You may need to get some advice around that - if mum is older and depending on her health, you would have to be careful that this would not be seen as deprivation of assets with regards to care costs.
 In this case the primary reason would not appear to be to avoid care costs. so you have a good argument to refute that but you would probably need to properly be able evidence that you have put money in and that it was not intended to be a gift to her and ideally that it was done when she was in good health and care costs were not reasonably foreseeable. 

Deprivation of Assets in Social Care | Age UK

Yes, I wondered about that. She is 81 but in great health, no imminent care needs. And five years ago when I put the money in even more so. The primary reason for needing to do this is for my daughter and I to have our own home again.

gwynlas

Your mum was in her mid 70s when you made this arrangement so you should have considered future needs,

Now she is older and does not want either the upheaval of downsizing or to be living on her own which might feel quite daunting.

Having extended your mums home is there no way that you can change the living arrangements possibly  swapping bedrooms and making your daughters room more of a bedsit?

I do not think that you can realistically prove the affordabilty for a mortgage on part time wages given that you would need to pay all other bills and have a financial dependent

EmmaL

gwynlas said:

Your mum was in her mid 70s when you made this arrangement so you should have considered future needs,

Now she is older and does not want either the upheaval of downsizing or to be living on her own which might feel quite daunting.

Having extended your mums home is there no way that you can change the living arrangements possibly  swapping bedrooms and making your daughters room more of a bedsit?

I do not think that you can realistically prove the affordabilty for a mortgage on part time wages given that you would need to pay all other bills and have a financial dependent

Yes, you are probably right. And I completely agree and in fact we had exactly this conversation five years ago about what living with a teenager would be like, would we all still be happy together. I had niggling doubts but she convinced me it would be fine. I should have stood firmer.

But what's done is done. I feel caught between a rock and hard place because I love my mum dearly but living with her means none of us appreciate each other as much as we would with a bit of space, and I hate that we're filling her life with so much drama. We all seem to rub each other up the wrong way constantly.

The house is already set up so that my mum has her own room and ensuite downstairs. We do share the kitchen/diner (the extension) and she has a separate living room to us (we'd never have lasted this long without that!). I'm so lucky we've been able to live here, - I think I'm just going to have to put up, shut up.