buying a house from a parent

Maria1203

Hi,

I dont know if anyone can help or has been in similar situation but any advise will be appreciated.

Currently we are living with my father in law in his house and wants to leave the house to my partner and myself (we are getting married in October if any help) but he has a loan on house through Senior money which means that loan has to be cleared before house deeds can be transferred. The loan amount is 75000 and house is worth between 220000-250000. I have contacted Mortgage brokers and banks for mortgage application but as i was advised none of them would consider giving me mortgage because after sales my father in law will still be living in the property with us.

Has anyone bought a parents house while living with them or would know if there is any other way???

TY

jimmycrackcorm

This is slightly confusing. Is the 75k to the FIL mortgage provider? Your solicitor should be able to sort it out that the required outstanding amount for mortgage and loan get paid off in sequence as party of the transaction.

Also I don't understand how the FIL staying with you after is relevant. How do they know this or is it that you are intending to be joint owners with him or have a stipulation that he gets security of tenure? If so then that is problematic as he has a hold over the property secured by any mortgage you might get.

Fian

You need to be aware that this is a connected party transaction. You will have a potential tax liability for the difference between the market price and the price you pay, but if your wife has not received previous gifts from him you will be within the permitted tax free amounta child can receive from a parent.

You will need a solicitor (as will your father in law) if this transaction is to go ahead.

Maria1203

My FIL has a loan with Senior Money on the strength of the house. So for me and my partner to be able to put the house on our own names, senior money has to be cleared off which is 75000. We rang up few banks to enquirer about mortgage and as soon as they heard that my FIL will remain in the house after the sale we got told straight away that they will not deal with the case unless we sign the contract and proof that FIL will move out.

seamus

The main issue here from the bank's perspective is probably the FIL's continuous residence.

If you were to buy a new house and move him in, that would be fine because he would be a licensee. But because the house is currently his principle residence, the rights he currently has to reside there would persist even after the sale.

Basically if the bank needed to sell the house and kick you out, they'd have real difficulty getting your FIL out as well because he would have distinct legal rights that would be unaffected by the bank's claim on the house. He could go to court and have the sale blocked on the basis that it's his family/principle residence.

It's no doubt something that can be done, but might need more pressure on brokers and banks.

As a matter of curiosity, what's the purpose of buying the house when the 3 of you are going to continue living there anyway? i.e. do you need to do this?

seamus

seamus wrote: »

As a matter of curiosity, what's the purpose of buying the house when the 3 of you are going to continue living there anyway? i.e. do you need to do this?

If nothing else it's worth doing to prevent the fair deal scheme getting its claws into the property if the father has potential to be in a nursing home at some point in the future.

Maria1203

seamus wrote: »

The main issue here from the bank's perspective is probably the FIL's continuous residence.

If you were to buy a new house and move him in, that would be fine because he would be a licensee. But because the house is currently his principle residence, the rights he currently has to reside there would persist even after the sale.

Basically if the bank needed to sell the house and kick you out, they'd have real difficulty getting your FIL out as well because he would have distinct legal rights that would be unaffected by the bank's claim on the house. He could go to court and have the sale blocked on the basis that it's his family/principle residence.

It's no doubt something that can be done, but might need more pressure on brokers and banks.

As a matter of curiosity, what's the purpose of buying the house when the 3 of you are going to continue living there anyway? i.e. do you need to do this?

I don't really get how to be honest as the house will go on our names. He is willing to sing anything to say that he will not cause any trouble and try to reclame house.

Well first able interest on loan is going up on the loan he has from senior money and also house needs some repairs and we would need to do attic conversation at least for more bedroom and we can't really put too much money into house unless we have some sort of guarantee that it will be ours if you know what I mean.