To ask whether being a homeowner is worth this?

Peppermintpatty56 · 2024-08-12T19:52:17+00:00

We have quite a weird financial situation. We rent, and are now in our 40s. Husband is a decent earner and as I'm disabled with 3 children classed as disabled also so we get disability benefits and UC. We have to move house, and for the first time, we're in a position where we could potentially buy. But we will lose income if we do- 1) because the mortgage payments are currently substantially more than our rent 2) we'd lose the housing element of UC. The deposit is gifted and obviously we wouldn't qualify for UC whilst it's in our possession. So, given our age and the fact we'd lose a substantial chunk of monthly income... how important is it to buy in your opinions?

Miley1967 · 19/08/2024 19:26

Tdcp · 13/08/2024 16:17

I found this on the gov website which may be useful for you.

"If you and/or your partner own the home you live in, your Universal Credit payment may include Support for Mortgage Interest (SMI). The amount you receive will be based on a set rate of interest applied to your outstanding mortgage. It will be paid direct to your mortgage lender"

This will not apply to op.

Greally · 19/08/2024 18:48

Rosscameasdoody · 19/08/2024 11:32

No. OP is deciding what will give the most long term benefit to her disabled children. If neither she nor her partner have any reasonable expectation of needing care themselves in the near future there’s nothing stopping them from planning a trust fund or similar for the children, so that the family home can’t be used for their care. Rich people do it. Why shouldn’t the parents of three disabled children be afforded the same facility ?

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My comment was to the PP, not OP.

Mainoo72 · 19/08/2024 11:57

I hated renting, so would do everything I could to buy. You don’t really want to be renting when you’re older. Having to keep moving is tough when you’re in your 70’s/80’s.

ntmdino · 19/08/2024 11:53

Another important point, regarding stability, is that when you're renting you a) don't necessarily get a choice as to when you move out and it can come out of the blue, and b) at that point you're at the mercy of rental pricing, and that only ever goes in one direction.

By contrast, with a mortgage you set the term over which your mortgage payments are fixed (eg 2 year/3 year/5 year etc). Sure, you're at the mercy of interest rates when the time comes to renew, but at least you have some control over it...and we're unlikely to see a massive interest rate spike like the one we've just had in the next 10 years or so.

Gogogo12345 · 19/08/2024 11:52

XChrome · 13/08/2024 04:34

Do it if it's at all within budget and the house is a good investment. You need the value to appreciate, which depends on where it is located and the current economic conditions in your area.

I'm selling my former home at an enormous profit which I will invest for my daughter's future. The value has gone up over 200% over 12 years. She will also get my current home. If you have an asset to hand down to your kids, you tend to worry less about their future. I hope you can manage it, but if it's not in budget, why not invest the deposit you were gifted instead so you can still buy in the future. See a financial advisor about that.

Depending on the OPs children's disabilities though they may not be able to work and reliant on benefits. So a 1/3rd share of a house they could inherit could disqualify then from means tested benefits but not be enough to buy something themselves

Gogogo12345 · 19/08/2024 11:48

Redglitter · 13/08/2024 00:47

Not everyone ends up in a care home though. That seems a crazy reason not to buy.

If they don't buy they'll rent forever and definitely have no house of their own at the end of it.

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They wouldn't need a house at the end of it as they would be dead

Rosscameasdoody · 19/08/2024 11:32

Greally · 13/08/2024 07:02

Are people really deciding whether to move house or not based on whether they or the state should pay care fees?

No. OP is deciding what will give the most long term benefit to her disabled children. If neither she nor her partner have any reasonable expectation of needing care themselves in the near future there’s nothing stopping them from planning a trust fund or similar for the children, so that the family home can’t be used for their care. Rich people do it. Why shouldn’t the parents of three disabled children be afforded the same facility ?

Rosscameasdoody · 19/08/2024 11:24

Peppermintpatty56 · 13/08/2024 20:22

Thank you so much!! That's so helpful, doing some research now

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Just one thing - you need to be aware that SMI isn’t a grant, it’s a loan which has to be paid back at some point.

Rosscameasdoody · 19/08/2024 11:22

MereDintofPandiculation · 13/08/2024 00:59

That’s a gamble. If the one of you who survives needs to go into a care home, you could lose the lot.

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If the children are disabled and living at home, the LA have to disregard the house in the financial assessment. I think the key here is financial planning. While there is no prospect of the OP or her partner needing care in the near future, they can plan. They could put the house in trust for the children so that it provides security and can’t be used for care fees. Would need to be done through an expert financial adviser though, so it’s watertight.

Original poster

Peppermintpatty56 · 13/08/2024 20:22

Tdcp · 13/08/2024 16:17

I found this on the gov website which may be useful for you.

"If you and/or your partner own the home you live in, your Universal Credit payment may include Support for Mortgage Interest (SMI). The amount you receive will be based on a set rate of interest applied to your outstanding mortgage. It will be paid direct to your mortgage lender"

Thank you so much!! That's so helpful, doing some research now

OP posts:

Tdcp · 13/08/2024 16:17

I found this on the gov website which may be useful for you.

"If you and/or your partner own the home you live in, your Universal Credit payment may include Support for Mortgage Interest (SMI). The amount you receive will be based on a set rate of interest applied to your outstanding mortgage. It will be paid direct to your mortgage lender"

Original poster

Peppermintpatty56 · 13/08/2024 15:32

Just to answer the question-
There's no such thing as a life tenancy round here anymore either. my mum has one so it used to be a thing.

Our deposit at the moment is very minimal (the minimum you can use) hence the payments being so much more than our rent. That's why I'm considering saving a bit and hoping we can get a better deal in a year or two.

The more we look into it we'd just have no wiggle room, and we need it with owning- what if something broke? I think we'd just be spreading ourselves too thin :-(

OP posts:

JanglyBeads · 13/08/2024 15:30

Sorry just seen you've considered that and it's a no go.

JanglyBeads · 13/08/2024 15:30

Shared ownership, half and half?

Original poster

Peppermintpatty56 · 13/08/2024 15:27

Greally · 13/08/2024 07:02

Are people really deciding whether to move house or not based on whether they or the state should pay care fees?

Not me, hate to be morbid but I'm not even sure I'll live that long

OP posts:

Greally · 13/08/2024 07:02

Are people really deciding whether to move house or not based on whether they or the state should pay care fees?

Greally · 13/08/2024 07:01

MereDintofPandiculation · 13/08/2024 00:59

That’s a gamble. If the one of you who survives needs to go into a care home, you could lose the lot.

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And move to…rented.

XChrome · 13/08/2024 04:34

Do it if it's at all within budget and the house is a good investment. You need the value to appreciate, which depends on where it is located and the current economic conditions in your area.

I'm selling my former home at an enormous profit which I will invest for my daughter's future. The value has gone up over 200% over 12 years. She will also get my current home. If you have an asset to hand down to your kids, you tend to worry less about their future. I hope you can manage it, but if it's not in budget, why not invest the deposit you were gifted instead so you can still buy in the future. See a financial advisor about that.

LiterallyOnFire · 13/08/2024 01:46

I think PP is saying that because they are 40. Waiting 18 months to save a max of 16k makes no sense. Because it reduces their max loan length. Which has knock on effect to a number of things.

Yes. thanks. That's what I was saying.

Inlaw · 13/08/2024 01:06

MereDintofPandiculation · 13/08/2024 01:04

No reason why the relative shouldn’t hold the money till the day it’s needed, is there?

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Of course.

I think PP is saying that because they are 40. Waiting 18 months to save a max of 16k makes no sense. Because it reduces their max loan length. Which has knock on effect to a number of things.

MereDintofPandiculation · 13/08/2024 01:04

LiterallyOnFire · 13/08/2024 00:11

Yeah don't delay and wipe an extra 18 months of your maximum term just to save something less than £16k . Not without a good specific reason for doing so. It could easily end up costing you more.

Give yourself a month to decide and to speak to a broker and ask your relative to hold onto the gifted deposit until then.

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No reason why the relative shouldn’t hold the money till the day it’s needed, is there?

MereDintofPandiculation · 13/08/2024 01:02

Redglitter · 13/08/2024 00:47

Not everyone ends up in a care home though. That seems a crazy reason not to buy.

If they don't buy they'll rent forever and definitely have no house of their own at the end of it.

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If you raise the unfairness of one set of children inheriting while the children of a similar family don’t, everyone clamours to tell you “but that’s what you save for! Care in your old age!”

MereDintofPandiculation · 13/08/2024 00:59

RunningThroughMyHead · 12/08/2024 22:30

And a big advantage for your children.

One of the major reasons why we keep "climbing the ladder" beyond wanting some more space is to have more to provide my kids when they're young adults. Equity gives me a lot of comfort for their sakes.

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That’s a gamble. If the one of you who survives needs to go into a care home, you could lose the lot.

Redglitter · 13/08/2024 00:47

TeachesOfPeaches · 12/08/2024 23:00

I wouldn't in your position as you'll have to sell the home to pay for care fees when you're old but if you rent you'll get it all for free and your rent gets paid now anyway.

Not everyone ends up in a care home though. That seems a crazy reason not to buy.

If they don't buy they'll rent forever and definitely have no house of their own at the end of it.

LiterallyOnFire · 13/08/2024 00:11

Peppermintpatty56 · 13/08/2024 00:03

Thank you all, reading your replies is all the things I keep going over in my head!

Just to answer a few questions, there is very little social housing in our area, especially the size we need. Also no shared ownership I can find without moving out of the area we need to be in for ds' specialist school.

The other option we have is we delay buying for now and revisit in 18 months/2 years when we could potentially get a better deal and lower payments. We could also use this time to save a bit to add to our deposit (inside the uc savings rules obvs).
We would have to rent again in the meantime with that option though, which I do worry is unsettling, especially for the kids. And time is ticking mortgage wise because of our ages.

Yeah don't delay and wipe an extra 18 months of your maximum term just to save something less than £16k . Not without a good specific reason for doing so. It could easily end up costing you more.

Give yourself a month to decide and to speak to a broker and ask your relative to hold onto the gifted deposit until then.