Can I mortgage house to help DD

I took out a £140,000 mortgage when I was 65 and already retired.

Basically you are talking about a buy to let mortgage? I think that they are a higher interest rate, but you would need to check it out. Would be best if you own the house, that way you protect your investment. Which could become an issue should your DD remarry - her husband would have an interest. I think that I would take legal advice and make some preliminary enquiries. Perhaps start off with your bank? Be aware though that circumstances change and you are only 70. Who knows what the future may bring but buying yourself would offer some protection.

Best get some proper legal advice. Although this does seem a good idea, there may be complications with HB being paid to a family member

buy to let rates are lower than standard rates and you can take a buy to let mortgage up to 80 years old from some companies.Dont go to the bank speak to someone like the Mortgage Works ,you'll get them online and they will explain whats needed.The rent paid has to cover the mortgage plus a bit more .Good luck .Hope it goes well .

There could well be a problem with the HB. If you already owned a property and were renting it out to a stranger, then the stranger left and your daughter moved in, HB might be paid.

For family members the thinking in HB is that even if she didn't pay the rent you would not make her homeless, so there would be no need for the state to pay the rent.

I don't think this is buy to let, it is simply borrowing against your assets. Your lender would want to know how you planned to pay back the mortgage and might not be so keen on you relying on your daughter to pay it. Perhaps you have sufficient income to cover the monthly payments?

I think the CAB may be able to advise about HB, not sure it covers mortgages payments.

I think this needs a lot of thinking through and professional advice.

We were in a position to give our children money to help buy houses without needing them to pay back but one of them did have to satisfy the solicitor that it was an outright gift to him and his wife.

Would a Life Time Mortgage work?

You’ll need a good bit more than the mortgage to cover rent.

You’ll need to cover all the safety requirements of landlords like gas certificate, PAT testing, Legionnaires testing and an increased house insurance premium.

Plus income tax on the rent of 20% minimum or more depending on your level of income.

Some Councils eg Nottingham also charge a fee to landlords, I think £700, to inspect and ensure rented properties meet a certain standard. This is on privately rented not council.

All legal landlord responsibilities will have to be met before the rental qualifies for Housing Benefit.

Also, bear in mind that if you need care in the future , the rental property will be classed as a disposable asset.

I’m a bit confused about who will own the house. The OP mentions giving her daughter a £75k deposit which suggests that her daughter would be buying the house but the expectation or hope of rent suggests that the property would be owned by the OP.

Other posters are right when they mention that a family arrangement re renting a property could cause issues with HB or the UC housing allowance. They are wary of manipulated scenarios such as you describe and might take the view that it isn’t a proper tenancy. Would you evict your daughter if she failed to pay the rent for instance?

And then there are tax and CGT implications and potentially inheritance tax issues (since a property will almost inevitably gain in value).

Lots to consider.

I was told by a FA that for buy to let mortgages lenders want you to charge 25% more for rent than the mortgage payments.

Egllantine You really dont ,you can get Buy to lets on interest only as the property is security for itself.So if you charge the mortgage plus the required % over it the OP's daughter could feasibly afford it WITHOUT claiming HB ,The OP should speak to a reputable Mortgage broker or company and establish facts .

When we looked into renting out our property we were informed that we would require 75% deposit.
As PP have also mentioned if you will be in receipt of her housing benefit you will be responsible for:
Landlords insurance
Gas and electric safety certificates and
Any repairs that need doing

Also. Some mortgages and insurance companies do not allow Housing benefit so make sure to ask.

ps.as long as you're paying the mortgage on time they wont care if you make any profit from it or who you rent to.Its only the benefits people who would need to know

Moneysupermarket do a basic guide to what’s involved in being a landlord.

Like tartlet, I’m not sure who will own the house, you or your daughter because that will alter things considerably.

You really need some specialised advice. Don’t rely onGransnet?

I'm confused. If you're giving DD a deposit, surely she would be the owner of the house bought using that deposit to find her own mortgage?

Are you thinking equity release to fund the £75k? If so, be very careful. Age UK is a good place for advice.

Claiming HB to benefit (pardon the pun) a family member is fraud AFAIK. Although I'm not sure where the "rent" is fitting in, unless you mean an arrangement to repay the £75?

There are "family mortgages" where a family member acts as a kind of guarantor for a first time buyer. The mortgage would be secured against the parents' home. I think Lloyds are doing one atm. Is that the type of thing you were after?

Try Family Springboard Mortgage by Barclays.

I think that your idea may get your DD or you into problems with the benefits agency if she needs the HB to pay the "rent" on the house

If your DD owns the property - then she may lose her eligibility to benefits as she would have assets worth way over the maximum allowed. Also wouldn't the mortgage need to be in her name?

If you own the house and your DD pays rent - then the Benefits agency may not accept you as a landlord as usually they won't pay benefits on houses owned by family members, plus you would need to meet all of the requirements for landlords such as safety certificates and insurance

DD wouldn't get HB on a property she owns and lives in.

She's highly unlikely to get HB to contribute to rent paid to a relative (especially her mother!) otherwise we'd all be doing it, wouldn't we?

If she lives in a house she owns, it wouldn't be an asset for the purposes of getting benefit. If she owns another house, then that's a different matter altogether.

Run the stats through a benefits checker such as entitled to or the one on the CAB website, using different scenarios.

Also - be aware that changes of circumstances are likely to trigger a claim for Universal Credit which opens a whole new can of worms.

Money Saving Expert is an excellent site for research.

We have a buy to let mortgage and our daughter and ex husband ( it’s complicated!) and ourGS live in it and pay us rent. We have a legal rental agreement to protect both us and ourDD.
We have an interest only mortgage and as long as they cover our expenses and tax we are happy. Of course this doesn’t always work. We’ve just renewed the kitchen!
In this way DD is secure and we still have control over the property if anything happens to their relationship. Although everything is good at the moment, one never knows.
It also means that we don’t compromise our home.

I don't see why not however you would need proof to your lender you had the means to keep up repayments.

Remember if you gift money tax will have to be paid on it if its more than 3K in any one year.

Only have to pay tax over £3k as inheritance tax when you die, if you are over the limit and live less than 7 years from the gift .

Go to a financial advisor connected to an estate agent and get the legal advice. I did this and was told I could not rent a property to a family member as a buy to let landlord. But there are ways around it. Good luck?