Questions about buying my Mums house...
Discussion
Afternoon 
This is all hypothetical at the moment but bear with me.
My Mum has a four bedroom house worth approx. £500,000. She is 62 years old and has around £100,000 left on her mortgage. Her current mortgage offer is due to end in the next year or so and she doesn't want to tie herself into another mortgage. She's been mentioning moving a little further out of Surrey and getting something the same size for less money so that she's mortgage free, however she'd rather stay put as her current house is close to work and close to my Nan and Granddad who are now in their late 80's and starting to become a little more dependent on my Mum for things.
My Sister and I currently live with my Mum and due to various reasons which aren't relevant this won't be changing anytime soon. If my Mum were to move then we would end up moving with her.
What I would like to know is if I could buy my Mums house for the £100,000 that she owes on her mortgage? She could pay her mortgage off and I will then have a mortgage for £100,000. Nobody has to move anywhere and when my Mum eventually passes away the house could then be sold and the money split between me and my two siblings. I've done some Googling on this an can't find a definitive answer. I'm sure there is an answer out there and I'm just not searching for the right thing.
If anyone can shed some light on the ins and outs of this it would be a great help.
Cheers,
Sammo
This is all hypothetical at the moment but bear with me.
My Mum has a four bedroom house worth approx. £500,000. She is 62 years old and has around £100,000 left on her mortgage. Her current mortgage offer is due to end in the next year or so and she doesn't want to tie herself into another mortgage. She's been mentioning moving a little further out of Surrey and getting something the same size for less money so that she's mortgage free, however she'd rather stay put as her current house is close to work and close to my Nan and Granddad who are now in their late 80's and starting to become a little more dependent on my Mum for things.
My Sister and I currently live with my Mum and due to various reasons which aren't relevant this won't be changing anytime soon. If my Mum were to move then we would end up moving with her.
What I would like to know is if I could buy my Mums house for the £100,000 that she owes on her mortgage? She could pay her mortgage off and I will then have a mortgage for £100,000. Nobody has to move anywhere and when my Mum eventually passes away the house could then be sold and the money split between me and my two siblings. I've done some Googling on this an can't find a definitive answer. I'm sure there is an answer out there and I'm just not searching for the right thing.
If anyone can shed some light on the ins and outs of this it would be a great help.
Cheers,
Sammo
I believe if you buy it below market value the remaining value counts as a gift from your mother to you, with the relevant tax implications (drops over 7 years).
Also think carefully about your relationship with your family. she'd effectively be gifting 400k to you, and even with the best intentions that kind of thing can cause families to fall out.
Also think carefully about your relationship with your family. she'd effectively be gifting 400k to you, and even with the best intentions that kind of thing can cause families to fall out.
RizzoTheRat said:
Also think carefully about your relationship with your family. she'd effectively be gifting 400k to you, and even with the best intentions that kind of thing can cause families to fall out.
Would make more sense to avoid any problems by all 3 kids buying it together, paying £33.3K each. RizzoTheRat said:
I believe if you buy it below market value the remaining value counts as a gift from your mother to you, with the relevant tax implications (drops over 7 years)
This was something I'd read online. Obviously barring any sudden illness my Mum is a fit and healthy 62 year old with no underlying health problems. We certainly expect to get more than another 7 years out of her 
TwigtheWonderkid said:
Would make more sense to avoid any problems by all 3 kids buying it together, paying £33.3K each.
Unfortunately this isn't an option for my Brother or Sister, hence asking if I could buy it by myself. We're not and have never been a dysfunctional family so the issue of falling out in the future isn't an issue.Sammo123 said:
Afternoon
My Sister and I currently live with my Mum and due to various reasons which aren't relevant this won't be changing anytime soon. If my Mum were to move then we would end up moving with her.
Sammo
I appreciate that you are only asking about the financial implications, but she is only 62.. .She could easily still be around in 40 years... Can you really be sure what could happen in that timeframe?My Sister and I currently live with my Mum and due to various reasons which aren't relevant this won't be changing anytime soon. If my Mum were to move then we would end up moving with her.
Sammo
BobsPigeon said:
Why doesn't she just remortgage it or keep the current mortgage and charge you and your sister board and lodgings to cover the cost of her mortgage? £600pcm or whatever it is.
Her intention is to retire in the next couple of years, hence not wanting another mortgage.hotchy said:
Another thought, it won't just be mortgage free, she will probably also have another 100k free money to go play with while retired. I say its about time you all flew the nest imo.
As I mentioned in my original post, we're living with her for various reasons, none of which are relevant to my question.hotchy said:
Buy your own house thats smaller... its much more fun. Let your mum enjoy being mortgage free
I'd love nothing more than to buy my own house, but unfortunately I don't earn enough by myself to mortgage anything over about £120,000 plus any deposit I may have. That doesn't buy you anything around here. Anyway, that's not what I'm asking I did something similar for my mother after my father passed away. They were joint mortgage holders and it would not have been possible for my mother to arrange a sole mortgage in her name due to her age and income after Dad passed.
She wanted to retain at least part ownership of her home (for security), I have a sister who wasn't in a position to contribute.
So it was important this was all above board and there was no suggestion of me taking advantage of the situation and "conning" my sister out of her inheritance. My sister and I just see financial things from a different perspective. We don't have much do do with each other but we get along enough to have sensible conversations when the need arises.
In the end I paid off Mum's mortgage and we agreed that I owned the percentage of the property that equated to the market value of the property at the time of the transaction equal to the amount of mortgage that I paid.
In simple terms using rounding numbers to make it easy.
Current House value £200,000
Mortgage £100,000
I paid off the mortgage I now own 50% of the property, mum can live there as long as she likes without cost and retains ownership of the remaining 50% (I have my own home). The upside for me is I know my mum is secure in her own home and I have a capital investment that will simply be a "pension" lump sum later in my life.
You each need your own solicitor so there is no perceived conflict of interest. Plus get this all lodged with the land registry so there's no possible arguments in the future.
Trying to "buy" a £500k house for £100k will likely create more issues than it solves.
She wanted to retain at least part ownership of her home (for security), I have a sister who wasn't in a position to contribute.
So it was important this was all above board and there was no suggestion of me taking advantage of the situation and "conning" my sister out of her inheritance. My sister and I just see financial things from a different perspective. We don't have much do do with each other but we get along enough to have sensible conversations when the need arises.
In the end I paid off Mum's mortgage and we agreed that I owned the percentage of the property that equated to the market value of the property at the time of the transaction equal to the amount of mortgage that I paid.
In simple terms using rounding numbers to make it easy.
Current House value £200,000
Mortgage £100,000
I paid off the mortgage I now own 50% of the property, mum can live there as long as she likes without cost and retains ownership of the remaining 50% (I have my own home). The upside for me is I know my mum is secure in her own home and I have a capital investment that will simply be a "pension" lump sum later in my life.
You each need your own solicitor so there is no perceived conflict of interest. Plus get this all lodged with the land registry so there's no possible arguments in the future.
Trying to "buy" a £500k house for £100k will likely create more issues than it solves.
There's a lot to consider. The mortgage lender are going to take some convincing that your mother has no financial interest in the property, potential tax implications, the legalities of what happens when/if your mum passes away or needs to go into a care home, what happens if your circumstances change - you pass away, you become ill, you lose half of everything in a messy divorce, you run into financial difficulty and the house gets repossessed. If you're looking at buying your own property in the future the mortgage lender will include full running costs for your mum's house, even though you don't pay them.
Not something I'd want to get involved with personally.
Not something I'd want to get involved with personally.
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