Buying dads share of house

[Housle]

Hello I hope I have posted this is the right place...

My parents are divorced but my mum still lives in the family home. The court order for the house is to be split 80/20 favouring my mum. Dad hasn't been too pushy about the house being sold as he doesn't need the money, he is living with his new partner. Also mum has cancer which is being well managed at the moment but just to give an idea of why dad hasn't pushed the sale.

Me and my partner have two young children. We do not own our house we rent.

My mum is getting older and is finding it harder to live alone. Our idea is for me to get a mortgage to buy the 20% off my dad. For me and my family to move into the house with my mum so we can care for her as she ages. The house while fine does need updating and perhaps extending to accommodate us all. In the least it would need a downstairs bathroom added as stairs are becoming more difficult.

Alternatively to this is selling the family home my dad taking his share, mum putting her share into a new house and me getting a mortgage for the remainder.

My question is can I get a mortgage without a deposit to buy my dad out? The house has been valued at £500'000. So I would need £100'000, more if we did decide to extend.

My mum has always said that her share of the house would be split 50/50 between me and my brother when she passes.

So that complicates things a bit when that time comes.

Do you see any problems with this arrangement? Any advice would be greatly appreciated.

Thank you

Any lender will want your name on the deeds, so there is equity that they can take if you default. They will also expect you to both be on the mortgage in nearly all cases.

If the property is worth £500k, they won’t allow you to take on a mortgage for £100k and have mum keep her £400k equity locked up in her own sole name.

Remember that mums share can be taken for care fees, if anything happens and if you have invested in a property and that goes up in value, her share will go up in value proportionately and will contribute towards care costs.

With you also having a brother, this sounds too messy, even if you could buy with cash. Would your brother be happy for you to co-own the family home and in effect, benefit from it now, when he will have to wait for his share until mum passes? It seems unfair on him.

I have known people who care for elderly parents, some for almost 30 years and to age 100 plus. In all cases bar one the child has a large house and the parent has moved in, in effect the parent has been subsidised. In one case a single mum, wealthy and high earning bought an equal share with her mum. The flaw in your case is you are seeking to benefit financially from this arrangement. I suspect your mum isn’t elderly but 60s to 70s, rather than 80s to 90s. If you want to buy a house and offer a home to your mum on an purely altruistic basis in the future that is one thing but your current idea is full of flaws e.g. what happens if your mum needs care, what happens if you split with your partner, how will your brother get his inheritance, what happens if you can’t pay the mortgage?

Thank you for your reply.

Yes I agree that it does seem quite messy with my brother. I guess the off set of benefitting from the house now would be that I would be the one caring for mum. We both really hate the idea of putting her in a care home when not absolutely necessary. But my brother caring for mum definitely wouldnt work, they do not communicate well.

We need to have a family meeting, just trying to get all my questions/queries together for when that happens.

@LadyLapsang Thank you for your reply.

All very valid points. You're right mum is mid 70s and her mum lived until 90 so its very possible she has 15+ years left.

We cannot afford to buy in the area we currently live. Mum is very set in her ways and refuses to leave the village she has always lived in. Perhaps when the reality of possibly going into a carehome hit she may change her mind..

If the house is valued at 500K, your mum owns 400K. If she were to die in the near future, the house would need to be sold to pay your DF his 100K and give your brother his 200K, leaving you with 200K.
In the longer term, you say now that you would look after your DM rather than seeing her go into a care home, but there are myriad threads on MN that show just how challenging this can be. And after doing that, you’d still have to sell the house to pay your brother his share. It sounds far too messy.

Without wishing to sound really negative (im not honestly) but as a worker in social care we do see situations quite often whereby families have followed this path and then the care needs of their loved one goes beyond what family members can cope with eg loss of mobility, cognitive impairment, incontinence. Very careful consideration is needed. This level of carer stress can seriously affect relationships also. I would definitely seek independent financial advice.