Can my pensioner mother gift her house to daughter?

[Kay123]

Hello,
My mum is just about to retire. She lives in Northern Ireland and now is ill and wants to move to England to live near me and my family. She has been trying to sell her house for the move (and quite a while before she wanted to move to England), but the value has plumetted to half and barely covers what is left on the mortgage, plus there has not been much interest from buyers.

If she stays in NI, then when her pension age kicks in in a few months she will have her mortgage and rates etc... paid through benefits.

She is now looking at renting out her house and then renting a house in England near me. But in doing so, she won't be eligible for any housing benefits. She would the be renting her house out for an equal amount to what she will have to pay to rent one to live in in England (even though it would be smaller), but will also have to pay the mortgage out of her pension. This would leave her with next to no money. Obviously I would help support her, but this is very hard.

However, if she could gift her N Ireland house to myself or my sister (it is not worth anywhere near the £325k inheritance tax threshold), then her income from renting out her house would cover her mortgage, and she would be eligible for housing benefit in England, leaving her with her state pension to live on.

But is this possible? Legal? We don't want to do anything wrong, but I don't want my mum to have to stay in NI.

Thanks.

[redcrx]

how could she have a mortgage on a house that she didnt own???

[Kay123]

She has an outstanding mortgage on her house in Ireland.

[bednobs]

no, the mortgage company wont allow her to have a mortgage on a house that belongs to someone else, as redcrx has said.
Besides that you say the house sale "barely" covers the mortgage, which kind of implies it does actually cover it, so perhaps if she lowers the price a bit, she can sell, pay off the mortgage and come to england

[redcrx]

so what you are saying is that you need to find a way so that she gives you her house and gets everything paid for by benefits? rather than her sell her house and live off profit or benefits.
your best bet, as bednobs says is to sell the house and move her to England, especially as she is ill and wants to be nearer to you

[Kay123]

Ah, I see what you mean. Yes, my sister would then be the one renting out the NI house and would pay off the mortgage with that income.
My mum would then have her rented house paid for through housing benefit, and could live off her state pension for food and bills.

[bednobs]

your sister would have to get her own mortgage on the house though. Your mum's mortgage company will not allow her to transfer the house to someone else

[Kay123]

Her house has been on the market for quite some time, and no offers. She has lowered the price again and again but still no takers.

[wolf63]

I am not awake yet - but if your mother gifts her house she is, potentially, depriving herself of capital. The housing benefit people can assume an amount of capital is held by your mother even if she does not actually have it.

I am sure that someone who is actually awake can help you further.

;-)

[LoftyLottie]

Basically, you cannot gift what you don't own. And your Mum doesn't own her house.

And if you did gift a house that you did own and then apply for benefits then it would be looked at as a way to get benefits and there would be questionned asked.

Is Northern Ireland different from the rest of us? Because we can't get mortgages paid on benefits when we retire over here.

If your Mum comes over to leave in England and has a house on the Market, she might qualify for benefits if she rents her house until her NI house is sold. Once it is sold she will be reassessed regarding benefits, and may or may not get them depending on her income and her capital.

[LoftyLottie]

'Questions asked'. I am not awake either!!

[LoftyLottie]

And she can't rent her mortgaged house out without permission from the building society and there will be income tax involved if she is receiving rent.

Can your mother stay with you whilst her house is on the market in NI, just as a temporary measure?

[Kay123]

Looks like dropping the price further and selling up may be the only option.

[Kay123]

And thaks for all of your advice. We're just trying to figure out how best to go about things.

[bednobs]

may i ask how long her mortgage has left to run? It's unusual (i think) for mortgage companies to allow people to take out mortgages that run until after retirement age (although i suppose becoming increasingly common). Is there a lot of mortgage left?
like the others i didn't realise mortgage is paid in the UK after you retire, are you sure? (perhaps NI is different?

[LoftyLottie]

Our mortgage runs until we reach 70 Bednobs. Not unusual these days. It was a remortgage and they suggested 2017, we didn't ask for it.

[ubasses]

Mortgages in this country can be given up to age 70 but you have to evidence ability to meet payments from retirement income. Obviously different financial institutions have there own rules on upper age limits which have probably been tightened up since the recession.

[LoftyLottie]

Funnily enough, we never had to give any evidence whatsoever of retirement income ubasses. The mortgage as taken out in 2002 for 15 years (suggested by the building society). We will be 70 in 2017. Mind you it isn't a huge amount and we have a lot of equity in our house.

[ubasses]

Small amount probably made a difference Lottie and as I said different places different way of looking at things. I certainly would not have signed a mortgage without the evidence, but the Bank I worked for were considered conservative lenders.