Buying a house

Dotty polly

Hi, just wondering can someone tell me if they have ever heard of a scenario like this please?
Person unable to get a mortgage is interested in purchasing the family home. Is it possible for them to go into a solicitor, get a contract drawn up & pay their parent monthly installments? Similar set up to paying back a mortgage really.
Parent will still live in the house until they go to meet their maker.
What are the cons to this? Or is it even possible?
Thanks

NIMAN

I'd say that unless you get the parent to gift the house to the child legally, then it will always belong to the parent, even if the child is paying them X amount per month.

Cons apart from that? The fact that the parent might live for another 30, 40 years? And it'll never be your house really?

Atlantic Dawn

So many variables, what if they make the payments and then in 10-20 years their parents get ill and have to be housed in a nursing home, there will be a clayback on the house to recoup this.

Dotty polly

NIMAN wrote: »

I'd say that unless you get the parent to gift the house to the child legally, then it will always belong to the parent, even if the child is paying them X amount per month.

Cons apart from that? The fact that the parent might live for another 30, 40 years? And it'll never be your house really?

Is there a way for a contract to be drawn up though that will protect the parent in this situation should it go ahead? For instance child starts paying monthly installments, ocassionally misses a payment after a period of time or stops paying after a few years.
Or if they did manage to get a mortgage is it possible for the contract to state the parent must be allowed reside in the house until they pass on. Obviously there would have to be a reduction in the market value of the house to allow for this.
Currently the will is split evenly between siblings should the parent pass on if that makes any difference?
And I’m not the interested buyer 😀 more a case of putting the feelers out to protect the current owner.

Dotty polly

Atlantic Dawn wrote: »

So many variables, what if they make the payments and then in 10-20 years their parents get ill and have to be housed in a nursing home, there will be a clayback on the house to recoup this.

Ok I see your point. As I posted earlier I wouldn’t mind a reduction in the price to allow for the parent to continue living there. However given what you have pointed out maybe it would be wise to pay full value & set aside a certain amount for the cost of nursing home/ carer.

NIMAN

Dotty polly wrote: »

Is there a way for a contract to be drawn up though that will protect the parent in this situation should it go ahead? For instance child starts paying monthly installments, ocassionally misses a payment after a period of time or stops paying after a few years.
Or if they did manage to get a mortgage is it possible for the contract to state the parent must be allowed reside in the house until they pass on. Obviously there would have to be a reduction in the market value of the house to allow for this.
Currently the will is split evenly between siblings should the parent pass on if that makes any difference?
And I’m not the interested buyer �� more a case of putting the feelers out to protect the current owner.

It makes a BIG difference surely.

If the house would be split between say 5 kids, and one wants to buy the house, then the other 4 will miss out (unless the parents pass on their share from the proceeds of the sale).

Dotty polly

NIMAN wrote: »

It makes a BIG difference surely.

If the house would be split between say 5 kids, and one wants to buy the house, then the other 4 will miss out.

The other 4 have their own houses & are well set up. There are some things we would like as in photos etc but would be quiet happy not to have to worry about selling/ renting it afterwards. This is of course purely on the grounds that the house is bought by the 5th sibling.
I suppose my worry is if they come to an arrangement that no mortgage is applied for (likely case due to bad credit) & they do a private sale with the money being paid on a monthly basis. I’m not confident this would be honored but I could be proved wrong too.
If a solicitor drew up an iron clad contract (which is what we would absolutely insist on) will that hold up if there were any hiccups along the way? Title of deeds would not be changed until after the parent has passed on even in the event of the house being paid for before that happens.
It all sounds very complicated & messy

NIMAN

It does sound messy ok.

And I wouldn't be so sure that people that are 'well set up' as you say wouldn't want their share of the pie when the time comes.

Money, or shares of wills, have caused many fractures in families over the years

You need to make an informal agreement with your parent (albeit, in writing).

Then go to a solicitor and get yourself added to the title of the house. Probably cost a grand or something to do that. Then when the parent/s die/s the house ownership is transferred to you solely. Unless you die in the meantime (in which case I presume it'll fall back to an even split among all the children of the parents, as per the will).

4ensic15

The way I have seen it done is that the parent and child go through a sales process but no money changes hands at that stage. the parent then registers an unpaid vendors lien on the property. There is an interest rate stipulated in the contract so the whole thing works like a private mortgage.

Dotty polly

NIMAN wrote: »

It does sound messy ok.

And I wouldn't be so sure that people that are 'well set up' as you say wouldn't want their share of the pie when the time comes.

Money, or shares of wills, have caused many fractures in families over the years

Yes I understand what you are saying. We have seen this before in the extended family & is something we very much want to avoid. Hence all the odd questions!
Parent has said if this goes through that any money left from the sale will go to the remaining 4 siblings. The 5th child’s inheritance is the gift of owning a house without paying interest & possibly at a lower price than market value. Now I’m sure a certain amount of money will be left to the 5th child but possibly less than the others.
My personal feeling on it is for the parent to spend as much as they can & leave as little as they can. I have no interest in buying it myself as another property. Some personal mementos & photos is really all I’d like when the day comes. The less that’s left behind to fight over the better I think!

Dotty polly

4ensic15 wrote: »

The way I have seen it done is that the parent and child go through a sales process but no money changes hands at that stage. the parent then registers an unpaid vendors lien on the property. There is an interest rate stipulated in the contract so the whole thing works like a private mortgage.

Can I ask have you seen this done much? I imagine it will be a common feature in the near future for some people. Provided all parties honor the terms it would be a great way for someone to get on the property ladder & keep the family home without insulting anyone in the family. I suppose it’s easy for us to view it as simply as this because we are all in a comfortable position bar one. However if there are a few children not in a position to get a mortgage then problems might present themselves very quickly!

4ensic15

Dotty polly wrote: »

Can I ask have you seen this done much? I imagine it will be a common feature in the near future for some people. Provided all parties honor the terms it would be a great way for someone to get on the property ladder & keep the family home without insulting anyone in the family. I suppose it’s easy for us to view it as simply as this because we are all in a comfortable position bar one. However if there are a few children not in a position to get a mortgage then problems might present themselves very quickly!

It is mainly with farms. Expensive legal and accountancy advise is needed.

kippy

Dotty polly wrote: »

Can I ask have you seen this done much? I imagine it will be a common feature in the near future for some people. Provided all parties honor the terms it would be a great way for someone to get on the property ladder & keep the family home without insulting anyone in the family. I suppose it’s easy for us to view it as simply as this because we are all in a comfortable position bar one. However if there are a few children not in a position to get a mortgage then problems might present themselves very quickly!

Why doesn't the persone with the bad credit rating work on getting it sorted out?
I've no idea of the details but I know if I was one of the family I'd be asking questions as to the long term care of the parent and responsibility for same as well as the long term "purchase" of the house and where the funds are to go should the parent pass on early.