Funding a complex move...

andys56 · 4 September 2017 at 12:40PM

Hi
I am asking for help with my situation. Basically my wife and i have found a house we wish to purchase in an area we know. Our family home is mortgage free, we have a second home in the same area mortgage free. The house we have offered on needs some work to enable my elderly mother in law to live with us, along with some updating, which means we would not be able to move in for however long those works take.
We are both retired.My mother in law has a house to sell too which is mortgage free.
She has early onset Alzheimer and we need her living with us to look after her, so we plan to retire permanently to this house we have found.
Its a complex move, but before I can go further I need to get finance. The collateral we have is nearly twice as much as the new house will cost. I have a healthy monthly 'wage' from my pension.
Any ideas on next steps??

G_M · 4 September 2017 at 12:46PM

A mortgage may be possible, but with limited providers and depending on your age. There are a few (smaller) building societies that lend up to age 70ish (subject to income & shorter term ie 10 - 15 years).

But the easiest option is surely to liquify some assets. Who lives in your 2nd property? Is itt empty or let out? Why not sell that?

Woul that generate enough for an outright purchase perhaps supplemented with savings?

Could you then afford the renovations, all move in, and then sell the other 2 properties (or let them out)?

Bear in mind you'll pay the additonal 3% SDLT on the new property.

If you need to sell 2 of the houses to finance the purchase, could you all live temporarily in eithr your current home or your MIL's home while renovations are done?

Without knowing full financial figures it's hard to say what's best!

teddysmum · 4 September 2017 at 12:55PM

There could be complications over co-owning with mother-in-law.

She has Alzheimers which you may find that you cannot manage (Lot's of people who are determined to do the caring themselves have to give up, because it is so demanding ) after a while, so will have to resort to residential care.

She would be self funding if she has over £23,250 in property and other assets, so if she owns a third of your house how would she pay ? It could mean selling the house to release her money, buying her share or paying for her care, as she will be considered to still have her portion of the houses value, even if it's partly someone else's .

Especially as she already has a disease which is known to need a lot of care, putting her money into a communal house could be sen as a deliberate case of Deprivation of Assets.

G_M · 4 September 2017 at 1:00PM

Given that she owns a property outright at present, it seems likely that any care costs would have to be self-funded.

The shared property might just protect against that and/or against forced sale of her property (though as teddysmum says 'Deprivation of Assets'), but if not, the question would be could she (or you) afford the care costs and retain the new property?

andys56 · 4 September 2017 at 1:41PM

Hi,
Mother in laws house is owned by my wife, the other properties by my wife and I.
MIL is not too bad but we want to have her with us when we move. We are aged 59 and 60 so able to care for her.
Property to be bought £320k plus renovation of say £70k
Three properties valued at £425k , £150k and £150k (MIL owned by my wife)
The new property would just be in my wife and I name
We would aim to move as soon as property is ready, so within a year and then pay back the finance
Thanks

00ec25 · 4 September 2017 at 1:45PM

as one of you is aged 60 or over the rule about forced sale does not apply if the property in question is occupied by both a carer over 60 and MIL as your main residence. Ie you will not be forced to sell the home you live in if MIL is a co-owner of it and resides with you at the point she goes into care. The council will instead put a charge on the property for MIL's share of its value.

xylophone · 4 September 2017 at 1:48PM

Do you or your wife have PoA for your MIL?

If not, as the AD is at an early stage, does she have sufficient capacity to grant it?

You say that you have offered for a property - you did this without any clear idea of how you would fund the purchase?

If you sold your current residence, would the purchase price cover the cost of the new property?

If so, you might sell it,

buy the new property,

sell MIL's property,

all live together in your second property while the renovations are done on the new property, ((I think it would be permissible for MIL to pay for such elements of these as directly contributed to her personal needs - keep a careful note of costings and receipts)

deposit/invest MIL's sale proceeds in her own name so that she can pay you "rent" as your lodger and have funds available should she need to self-fund in a care home.

You can then either sell or keep the second property as required.

andys56 · 4 September 2017 at 3:34PM

Thanks for your replies, though the issue is not really my MIL health as we are dealing with that.
It's more the juggling of finances.
Realistically, we want to sell a house (ours) and move to a different part of the country where we have a small second home. My MIL lives on her own a couple of miles away from where we live now in a house owned by my wife.
I don't wish to put MIL through two upheavals by selling the house she lives in to move in with us, and then move again in 6-12 months time.
The house my wife and I have will more than pay for the new one, and then we have two further properties to provide income later.
My problem is to bridge that time gap and minimise upheaval
Thanks
I am thinking bridging loans, short term mortgages etc

scottishblondie · 4 September 2017 at 4:01PM

So none of the properties actually belong to MIL at the moment, and she will not be a joint owner of the new property, she'll just be living there? Has the house MIL currently lives in always been owned by your wife, or is this a recent thing?

At any rate, the simplest solution to me seems to be that you sell your current main residence to fund the purchase of the new house in its entirety. Put your stuff into storage and live in the small second home while renovations are underway. You wife could either come with you or live with her mother depending on the level of care she currently requires. Then when the new house is done sell MIL's house and all move into the new place together. Then you can decide what to do with the second home.

xylophone · 4 September 2017 at 5:51PM

I posted my last before I saw the post in which you added the information that your wife owns your MIL's house.

Is this because she bought it/inherited it/was given it by her mother?

If it was a gift, then it may be that if she should need means tested care, questions will be asked by the council.

That aside, as the poster above says, if the sale of your residence will cover the cost of the new home, then you buy it with the proceeds, live in your second property, do the renovations, move in, move MIL in and then keep MIL's house or sell as required.

andys56 · 5 September 2017 at 9:50AM

Problem is MIL home and our second property are 21/2 hours apart, and the second home is a small cottage..so cannot live away from MIL and second property is far too small for us to live in.

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Funding a complex move...

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