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

Devorgilla,we've bought several flats/houses for our kids over the years with no issues,as lobng as they pay rent until they can get back on their feetits not a problem and the money will be going to them when we're dead.

could you get a buy to let mortgage on the new house,that way she wouldn't need to pay the rent until she can afford to and as long as you make the mortgage payments it should be fine,then as long as its 6 months from date of purchase you can resell it to her ,check with a mortgage broker for details ,but that would mean just one move for them so the children wouldn't have to move again

I think this is a disaster waiting to happen. Do nothing until you have run it past a solicitor. You could end up being responsible for paying for two properties. Can you really afford that? Is it not possible to work out a solution in your own home or for her to lower the price for a quick sale? I am a great believer in people being responsible for their own debts. Good luck with it anyway. I suppose it comes down to how reliable and trustworthy you think she is. Tying yourself into a monetary situation with family members is usually a recipe for disaster in my view.

bytheway sorry to read about the tragic circumstances in which your stepdaughter's husband died.

Just another point - if her house was bought on a shared ownership or similar basis, selling it might not be straight forward and/or there may not be as much equity in it as she thinks there is.

I can't help but wonder - has this in part got to do with the fact that she has her heart set on buying this particular house and her father (or you too) wanting to in some way compensate for what the family has been through?

Just a point, bytheway, say you rented a property for the family on a six month let.

It would take at least 3-4 months from the date of an offer being accepted on SD's previous house to a completion date and there's no guarantee that offer wouldn't fall through. You'd probably be safer with a 12 month let.

Hi, thanks for all your thoughts.

Lots of things to think about. To address a few questions my step-d husband took his own life (tragically) so no entitlement for mortgage to be paid off.

I think she would rather sell her own home than rent it out. It holds a lot of bad memories and i think she'd rather be 'well rid' of it.

The new house value is approx £110,000 so not sure where we stand on stamp duty for a 2nd property. DH is 58 and retired on a company pension and i am 48 and in full time employment.

We aren't in a position to buy her home as its value is over 200,000k though there is some equity it in. It was a new build for first time buyers so she/they had some government scheme to assist with the mortgage i think.

We did discuss renting another property for her but it would mean moving all 3 of them (the children are toddlers)and then moving again when the house sells which she isn't keen on either. Also, most houses have a 6 month minimum let and if her house did sell when she'd just moved into rented property, we'd still have months of rent to pay.

If she loses her job then the plan would be (i think) that she would be able to claim housing benefit which would cover the mortgage.

Regardless, we are in a position where, fortunately we could cover the mortgage regardless of the time it takes to sell the house.

Any more thoughts or input greatfully received

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?

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.

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

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

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

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.

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

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.

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.

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.

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

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.

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.

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 up...as nanaK54 says, it could end up getting horribly complicated and the OP and her DH could end up losing a lot of money.

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.

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

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?

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

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?