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Buying parents house .

(61 Posts)
Bedsheets4knickers Sun 23-Nov-14 17:35:05

My dad lost his job 2 weeks ago. He has no private pension . They own a property of about £160k. I don't live there my younger sister still does. We have about 15k in savings between us . We want to buy the house at full asking price.
We can both afford the mortgage . We want our parents to carry on living there like normal. We would both be 1st time buyers. What's important to us is a) my parents enjoying the decades if blood sweat and tears that have gone into
paying the mortgage b) to get a foot on the property ladder.
Can anyway advise on this situation . His work pay ends in jan then they are relying on pension .

TalkinPeace Sun 23-Nov-14 19:47:51

Slow down.

How much is his mortgage?
How much as percent of property?
How long to go?
What are his chances of another job?

The mortgage company will do diddly squat in the first few months of arrears if he keeps them informed

why on EARTH would you want to pay market price?
Just to give the banks more profit?

You could just pay him "rent" that covers the mortgage and have a simple legal document to give you rights to the house over time

but do NOTHING in a hurry

Bedsheets4knickers Sun 23-Nov-14 20:12:12

Property paid

Bedsheets4knickers Sun 23-Nov-14 20:13:51

They have already paid the house off sorry thought I'd put that. Our thoughts were to buy the house from them

peskyprolapse Sun 23-Nov-14 20:15:58

They own the house outright.

So you want to give them £160k?

Sorry, what? Surely they just need a hand with bills for a bit?

TalkinPeace Sun 23-Nov-14 20:19:42

for a start, is your sister paying them rent up to the £4750 per year tax free rent a room allowance?

it seems you want to give them a pension rather than buy the house

why not set up an agreement to pay them - say- £10,000 a year and thus buy the house from them over 16 years

so if they die you already own it ...

Bedsheets4knickers Sun 23-Nov-14 20:19:59

No my dads 65 he's had 2 minor strokes and really talking straight he's knackerd . My mum had a slipped disc 20 years ago which has left her leg very weak. She hasn't worked for about 12 years.

LIZS Sun 23-Nov-14 20:22:10

Makes no financial sense for you and your sister to pay interest long term on a mortgage if they own the asset outright already and would put the money in the bank at an even lower rate. Do you even earn enough to get a mortgage of 145k ? What about if either of your circumstances change and you want to buy a property with a partner or elsewhere ? How old is your dad , might he get another job , would his pension not even cover the outgoings, if not that is more cost to you and sister ?

peskyprolapse Sun 23-Nov-14 20:22:12

(Give them 160k and the banks, what, 100k once you've paid all that interest?)

Could they give you the house and you give them an amount each month?

peskyprolapse Sun 23-Nov-14 20:24:06

Subject to tax of course.

Unless they pay market rent for it.

TalkinPeace Sun 23-Nov-14 20:25:06

OK, a bit of drip feed going on here, making it hard to make sensible advice.

Am I right in thinking that you and your sis want to turn their house into a pension for your parents?

The most fee efficient way to do that will be for the two of you to "buy" it directly from them over a number of years
if they are 65 then you can make the payments just below their tax allowances allowing for state pension
and if your sis is living in the house, you and she could help out on bills without enriching the finance industry

Quitelikely Sun 23-Nov-14 20:25:19

The only thing I think you need to be aware of is if you ever meet someone and want to buy a property of your own your bank will want to know why you are buying this house and not getting a rental income

Similarly you will need a buy to let mortgage

Bedsheets4knickers Sun 23-Nov-14 20:27:32

Sorry trying not to drip feed. Thinking out loud if you like .we don't know what to do . As of jan they have enough to pay outgoings , they'll lose the car as it was a company car. They'll have about £270 for food

Quitelikely Sun 23-Nov-14 20:27:33

You could get an ordinary mortgage but that would be fraudulent.

Bedsheets4knickers Sun 23-Nov-14 20:28:54

Can I ask why it would be fraudulent

Mouthfulofquiz Sun 23-Nov-14 20:30:07

Good advice from those above. Stop and take a breath and don't unneccessarily give the bank loads of extra money. Would a trip to a solicitor be a good idea so you can set something up to avoid this?

NoArmaniNoPunani Sun 23-Nov-14 20:31:11

Do what talkinpeace suggests. Getting a mortgage would just make the bank more money and not benefit your parents

TalkinPeace Sun 23-Nov-14 20:31:55

Not a BTL and not fraudulent
a mortgage is irrelevant as you might as well give THEM the money rather than a bank

at 65 they will have pension

does your mum claim any and all disability allowances she is entitled to
(pride has no place here - rather the money goes to your mum than a banker in london)

Bedsheets4knickers Sun 23-Nov-14 20:32:07

Also it seems so unfair we have to buy a let mortgage when we are not letting the house. If they sold to joe blogs down the road they wouldn't need a let mortgage . I don't see the fairness

ClashCityRocker Sun 23-Nov-14 20:33:22

It could be done without the mortgage as a loan agreement between you and your parents - just pay them what you would've paid on the mortgage.

However, I'm not sure I'd want to go down this route if it was my house.

What happens if you/your sister lose your jobs and become unable to work?

I'm not sure the banks would be overly happy about a first time buyer with a less than ten percent deposit who wouldn't actually be living in the house.

TalkinPeace Sun 23-Nov-14 20:35:38

A half decent solicitor would be able to draw you up a deed - possibly as part of sorting your parents wills - that you but the house from them over 10 years at £16,000 a year - so £8,000 each per year
doubt it would cost more than £300 to set up : LOTS cheaper than a mortgage

LIZS Sun 23-Nov-14 20:37:05

£270 before they start claiming anything else sounds a reasonable amount for 2 of them to live on tbh. Does your sister pay her way ? Have they looked into pension credit and other benefits ? What you are proposing seems rather ott

TalkinPeace Sun 23-Nov-14 20:38:38

£270 per week / month ?

Bedsheets4knickers Sun 23-Nov-14 20:39:19

What happens to them after the 10 years tho??

TalkinPeace Sun 23-Nov-14 20:41:47

There is the state pension - higher once they are 75,
there are disability benefits
AND you and your sis may be in better finances - so able to support them more

the main thing is to think SLOWLY

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