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Buying a house short term....let me explain

(77 Posts)
bytheway Thu 19-Jan-17 18:04:13

My stepdaughter and her 2 children have been living with us for 3 months now following the death of her husband.

We live in the north of England and they until his death they lived 200 miles away.

She is fortunate in that after her bereavement leave her employers have found her a suitable job in our area.
She has now had her house up for sale for 2 months with no luck, she also has an eye on a house to buy in our area when her house sells.

Unfortunately, things at our house have become very stressful (particularly for me as her step mother) having 3 extra people in the house and i have been getting very ill with it.

My husband has come up with an idea, which suits his daughter and me and i'm wondering what you all think?

This is the idea - me and hubby buy the house she wants, we would have to take a an approx 80k mortgage (which shouldn't be a problem)Step-D and GC move in. We agree to pay the mortgage until her house sells (as she is mortgaged to the hilt and cannot afford any further rent or mortgage at the moment)then when her house sells, she buys the new house off us at cost price.

This seems such an easy solution so i'm sure i must be missing something. Can anyone tell me what the potential problems might be?


Grannyknot Thu 19-Jan-17 18:07:47

Have you thought about - what if her house doesn't sell ...?

Sorry you're in this predicament.

Antonia Thu 19-Jan-17 18:11:40

Perhaps you should discuss this with a solicitor before you buy anything. Not being a wet blanket but what would happen if she finally decides she doesn't want to buy the house?

Charleygirl Thu 19-Jan-17 18:12:51

I do not know the ins and outs of it but as you will own two houses, you will be paying extra tax?

FarNorth Thu 19-Jan-17 18:16:57

If you sell it to her for the same price you paid, you will be out of pocket for the expenses involved in the buying and selling.

That said, if I could afford to do this for DC in such a situation, I would do it.

Luckygirl Thu 19-Jan-17 18:17:54

You will certainly pay twice the stamp duty.

Ana Thu 19-Jan-17 18:18:29

And as SD's present house is mortgaged to the hilt, presumably there won't by much equity? How long will it take her to pay you back - what if she loses her job etc.?

Unless you can comfortably afford to lose £80k it doesn't sound like the ideal solution.

Perhaps it would be better for you to pay for her to rent somewhere in the short term?

FarNorth Thu 19-Jan-17 18:19:04

Another thought, any chance you could buy her present house to sell on, and she could buy the house she wants right away?

chelseababy Thu 19-Jan-17 18:30:08

Lower the selling price for a quicker sale and give her the difference? You would be paying for new accommodation anyway. Is there a reason her mortgage wasn't paid off when her husband died?

nanaK54 Thu 19-Jan-17 18:42:21

Honestly think this could get horribly complicated......

durhamjen Thu 19-Jan-17 18:51:26

I think it's a good idea.
You will have the house in your name until she sells her original house and buys the new one. There will not be any stamp duty to pay on a house worth less than £125,000 anyway.

Like FarNorth says, I would do it if I could afford to.

Ana Thu 19-Jan-17 18:57:35

bytheway hasn't said how much the house they're proposing to buy will cost, just that a mortgage of £80k will have to be raised.

Meanwhile, until the daughter's house is sold the mortgage payments on that property will be mounting nanaK54 says, it could end up getting horribly complicated and the OP and her DH could end up losing a lot of money.

Alima Thu 19-Jan-17 19:04:30

Since April last year an extra property or property for buy to let incurs a sliding scale percentage stamp duty. Up to 150K it is 3%. Not explained this at all well but please check it out before you go ahead.

J52 Thu 19-Jan-17 19:04:50

Depending on your age a mortgage could be difficult to obtain, there are all sorts of rules around affordability and claims on the resale should the mortgagee default.

I certainly would discuss it with a specialist property solicitor.

Grannyben Thu 19-Jan-17 19:10:44

As chelseababy, I wonder was there not an insurance policy covering the mortgage in the event of one owner passing away. I always believed your mortgage provider insisted you take out a policy and I know when we had a mortgage we had to provide our details

durhamjen Thu 19-Jan-17 19:15:55

Yes, I forgot about that, Alima. Didn't Cherie Blair make sure she bought more properties to rent out before that date?

If they just buy it, and let her stepdaughter live in it, not charging rent, as she will still be paying mortgage on the first house, will they still be charged stamp duty?

I still think I would do it in that situation, to help her. I wouldn't be worried about losing a lot of money if it was to help my bereaved child.

Alima Thu 19-Jan-17 19:17:36

Rather than getting a mortgage, paying all the fees, stamp duty, estate agent's fee when you want to sell it on etc what about renting a property for her? Short term let, some do 6-monthly, yearly rents. Some do rolling monthly terms. May be worth looking into. Don't you have to keep a property for a minimum time before selling again? Something about money laundering rules I think.

Jalima Thu 19-Jan-17 19:19:28

It all sounds very complicated.

Would it be better to help her out with the rent on a property nearby until she manages to sell her own house?

It could, in fact, be cheaper in the long-term unless you intend to keep this house as a rental property.

Alima Thu 19-Jan-17 19:20:28

durhamjen, we are currently doing something on these lines. The stamp duty came as a bit of a shock!

Ana Thu 19-Jan-17 19:22:32

No, but it would be silly just to throw it away!

Seek expert advice, bytheway, most of us on GN don't have the knowledge to advise you.

Ana Thu 19-Jan-17 19:23:23

I suggested that, Jalima, seems like a good compromise to me.

Jalima Thu 19-Jan-17 19:24:11

I must read all the thread first .....

GrandmaMoira Thu 19-Jan-17 19:24:11

Could she let the house she is trying to sell? This would cover her mortgage payments.

Christinefrance Thu 19-Jan-17 19:38:22

So sorry for your family's loss bytheway. Think your solution us fraught with problems. You could buy the house she currently owns but that would involve extra tax etc or you could pay the rent on a place near you. I realise your stepdaughter has seen a house to buy but there will be others. Anything you decide should be checked over by a solicitor to ensure all parties are protected.

NfkDumpling Thu 19-Jan-17 20:15:24

Two months isn't long to find a buyer but is her estate agent pushing enough for a sale - actually contacting prospective buyers who've left their contact details (they're especially bad at this), special listing on Rightmove, etc? Around here Open House days are very successful.

It can take several months for a sale to be agreed and reach completion so even if you did fund the purchase of the local house you could still find your home overcrowded for some time, so it may be cheaper for you to fund a bridging loan to hurry things up and hope that SD's house sells in the meantime. Perhaps a talk with a mortgage advisor may be a good idea?