Mortgage and gifted deposits

boom87

Not sure that title is exactly right but let me explain,

Currently a homeowner looking to sell up, however the plan is for us and the in-laws to both sell up and buy a much bigger place further away, so the purchase would be made up of thier house sale (100% equity) and the equity in our home after clearing the outstanding mortgage and then a fresh mortgage from myself.

Whats the best way of doing that? I understand they could gift thier proceeds from ale and it behave like a gifted deposit, but would that work if they're also going to live in the property with us? Cpuld everyone be on the deeds so it wouldn't be gifted but have the mortgage only in my name? What are our options?

ACG

You will likely need a broker for this.

Its not a gift as it has strings attached - ie they live in the property.

Being on the deeds but not the mortgage cant happen.

You will all need to be on the mortgage. But you will presumably need a lender who will ignore their ages.

It can be done, but I doubt it will be high street.

Brie

We did something similar a few years back. We sold our house (with mortgage) and MiL's flat (no mortgage) and used a large portion of her cash to allow us to buy a place big enough for all 3 of us.

The mortgage company wouldn't allow her to be on the mortgage/deeds because of her age (90+) so she had to gift us the cash so the place was owned by myself and my spouse. This was fine until she needed to go into care (repeated falls and beyond us to assist) and the local authority said it was deprivation of assets as she had given us the money that allowed us to support her relative independence for a few years. On that basis they were pushing to make us homeless as "her" home needed to be sold to pay for her care. This idea was abandoned when they found out I was aged 60 and they weren't allowed to kick me out. They did then talk about putting a charge on the house so that any money they had to pay for care fees was recovered when it was eventually sold (like in 30 years time….).

All of this came to nothing as she subsequently died before her savings got so low the LA had to actually pay for her care.

So as ACG states it will depend on the mortgage company being willing to have them on the deeds. But also be aware in case they do need care paid for that things could be a bit fraught.

MWT

Do take some financial advice as well since this path is one the Local Authorities are very much aware of when it comes to care fees as mentioned above, and it is also not a way to avoid IHT due to their reservation of benefit implicit in occupying the premises.