Helping my 67 yr old Mum get a mortgage (no equity)
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I am looking for some advise in what feels like a helpless situation. My questions are:
1) Are we in a position to obtain some kind of bridging loan to enable us to buy and renovate a property to make a profit? This profit could then be equity/ deposit towards another property
2) Can we somehow use our financial situation to release money or arrange a mortgage on my Mum's behalf?
3) Any ideas we haven't thought of? Buy to let?
Background
The reason behind us wanting to do this is because my Mother is about to split from her long-term partner. She had previously given us and her other daughter all of her capital to buy our own houses, when she sold her house to move in with this partner many years ago. She is 67 and on a very good head teachers pension but has not got a deposit to buy a house. We also can't afford a regulated buy to let property for her for the same reason of having no initial capital between us. Obviously she does have the option to rent but this is, for us, is a worst-case scenario before we've exhausted all other possibilities. We will also consider downsizing ourselves or buying a new house that has enough rooms for her or an annexe. But the point of this post is to see if anyone (with more knowledge than us!) can help see if there is another option we could consider first.
Financial situation
We have a mortgage of £225000 on a property now worth approx £310,000. My husband is employed and has an income of £40,000 and I am self-employed and my net profit averages £22,000 with 3 years of authorised accounts. Our total monthly outgoings are £2,800 and our combined monthly income is £3720. We have one credit card balance at £5500 and one loan with dfs at £1326, the payments for those are included in the outgoings mentioned above. We only have £1000 in savings. My sister is not in a position to be able to help at all due to her not working, her husband on a low wage and they are mortgaged to the hilt.
Ideally she'd like to buy a property that is at least 145K and even more ideally towards 180K due to her wanting live near us and her grandchildren. Her income is 2500 per month.
We would really appreciate your advise on the above.
1) Are we in a position to obtain some kind of bridging loan to enable us to buy and renovate a property to make a profit? This profit could then be equity/ deposit towards another property
2) Can we somehow use our financial situation to release money or arrange a mortgage on my Mum's behalf?
3) Any ideas we haven't thought of? Buy to let?
Background
The reason behind us wanting to do this is because my Mother is about to split from her long-term partner. She had previously given us and her other daughter all of her capital to buy our own houses, when she sold her house to move in with this partner many years ago. She is 67 and on a very good head teachers pension but has not got a deposit to buy a house. We also can't afford a regulated buy to let property for her for the same reason of having no initial capital between us. Obviously she does have the option to rent but this is, for us, is a worst-case scenario before we've exhausted all other possibilities. We will also consider downsizing ourselves or buying a new house that has enough rooms for her or an annexe. But the point of this post is to see if anyone (with more knowledge than us!) can help see if there is another option we could consider first.
Financial situation
We have a mortgage of £225000 on a property now worth approx £310,000. My husband is employed and has an income of £40,000 and I am self-employed and my net profit averages £22,000 with 3 years of authorised accounts. Our total monthly outgoings are £2,800 and our combined monthly income is £3720. We have one credit card balance at £5500 and one loan with dfs at £1326, the payments for those are included in the outgoings mentioned above. We only have £1000 in savings. My sister is not in a position to be able to help at all due to her not working, her husband on a low wage and they are mortgaged to the hilt.
Ideally she'd like to buy a property that is at least 145K and even more ideally towards 180K due to her wanting live near us and her grandchildren. Her income is 2500 per month.
We would really appreciate your advise on the above.
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Comments
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In terms of releasing money for a deposit, you could re-mortgage your current house, to release some of the equity? But then you're still in the position of a second home/regulated buy to let needing to look affordable on your wages...0
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why is renting a worst case scenario? she has a roof over her head. Why is it a must to buy the house? there is maintenance issues you need pay for as well as tax implications e.t.c"It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
G_M/ Bowlhead99 RIP0 -
Yes it seems, this option reaches that dead end. Unless I'm missing something, my Mum could pay the mortgage but it doesn't look like this is going to pass an affordability test.0
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Worst case is wrong wording really. It's more a personal/emotional reason that there is no need to go into here. Just seeing if we can explore/exhaust other options first.0
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Your mother made a terrible decision when she decided to give her entire capital away, and I think it would be another terrible mistake to go with any of your options. What happens to her for instance if your husband loses his job?
Luckily she has a good pension, so she should keep things simple and rent. There are housing associations like Anchor Housing that specialise in properties for older people, so maybe that should be her first port of call.0 -
Perhaps you and your siblings should sell up and give your mother all her money back? Then you either buy smaller houses or go into rented yourselves. Or, remortgage your properties for the equivalent amount and give it to her.
Failing that, she accepts the consequences of her terrible decision to give all her money away, and moves into rented.0 -
Keep_pedalling wrote: »Your mother made a terrible decision when she decided to give her entire capital away, and I think it would be another terrible mistake to go with any of your options. What happens to her for instance if your husband loses his job?
Luckily she has a good pension, so she should keep things simple and rent. There are housing associations like Anchor Housing that specialise in properties for older people, so maybe that should be her first port of call.
Yes, it was a terrible decision made a long time ago. Too late now.
Fair point re. husbands job - and one that has to be seriously considered. She wants to live close to myself and my sister and to be there for the grandchildren. There are very few suitable rents near us. Slight complication is for 4 months of the year she has to accommodate her mentally !!!!!! sister, so requires a 2 bed.
No snap decisions will be made to avoid making a terrible mistake, however we do want to explore all possibilities.0 -
AnotherJoe wrote: »Perhaps you and your siblings should sell up and give your mother all her money back? Then you either buy smaller houses or go into rented yourselves. Or, remortgage your properties for the equivalent amount and give it to her.
Failing that, she accepts the consequences of her terrible decision to give all her money away, and moves into rented.
We are looking into remortgaging to release some equity and will certainly consider down-sizing too. However, my Mum made that 'terrible' decision all those years ago as she is an entire selfless person (to a fault!) and I know she wouldn't hear of that and would prefer to rent then see that happen.0 -
Yes, it was a terrible decision made a long time ago. Too late now.
Fair point re. husbands job - and one that has to be seriously considered. She wants to live close to myself and my sister and to be there for the grandchildren. There are very few suitable rents near us. Slight complication is for 4 months of the year she has to accommodate her mentally !!!!!! sister, so requires a 2 bed.
No snap decisions will be made to avoid making a terrible mistake, however we do want to explore all possibilities.
Worth checking out housing associations for older people, to see if any have properties near you, most offer 2 bedroom options.0 -
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