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  • FIRST POST
    • Boicey570
    • By Boicey570 16th Mar 17, 10:33 AM
    • 6Posts
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    Boicey570
    Get a mortgage on half a house
    • #1
    • 16th Mar 17, 10:33 AM
    Get a mortgage on half a house 16th Mar 17 at 10:33 AM
    Hi,

    In about 18 months my family and I are thinking of moving into my wifes parents property which currently has no mortgage outstanding on the property, and is worth about £500k.

    From the sale of our property we will raise at least £100 and want to buy half the house from them, with the remaining half kept in their name, so we will only need about £150k to do so.

    Both the parents are over 70 and want to release some equity and we want to buy into a property we could never afford to purchase on our own.

    The remaining half would be left as inheritance to my wife and her sister, probably split about 70/30 in favour of my wife as her parents want to pass on equity to her sister now.

    The parents are also extending the property to add on an annex house, so after the work is done it will probably be valued around £700k as of current martket value and long term we would own 85%

    My personal choice would be to buy into their house, take out an unsecured loan every 2 years, and give them £25k to slowly buy half the house, but they are leaning towards wanting all the equity now due to their age.

    Any advice out there?

    Thanks.
Page 1
    • LindaMary
    • By LindaMary 16th Mar 17, 10:52 AM
    • 177 Posts
    • 76 Thanks
    LindaMary
    • #2
    • 16th Mar 17, 10:52 AM
    • #2
    • 16th Mar 17, 10:52 AM
    What happens if either or both have to go into care?
    • Pixie5740
    • By Pixie5740 16th Mar 17, 10:56 AM
    • 10,385 Posts
    • 14,224 Thanks
    Pixie5740
    • #3
    • 16th Mar 17, 10:56 AM
    • #3
    • 16th Mar 17, 10:56 AM
    I'm almost certain that you can't get a mortgage for half a house. If you defaulted on the mortgage how would the lender recover their money if the other owners refused to sell?
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • Boicey570
    • By Boicey570 16th Mar 17, 10:58 AM
    • 6 Posts
    • 0 Thanks
    Boicey570
    • #4
    • 16th Mar 17, 10:58 AM
    • #4
    • 16th Mar 17, 10:58 AM
    Are you talking about having to use their half of the house to cover the costs of them going into care. This did cross my mind as well, but I'll stick to the optimistic choice of "thats what family are for". My wifes mum took care of hers at home, I'm 99% sure the 2 daughters would do the same if it came down to it.
    • ACG
    • By ACG 16th Mar 17, 11:20 AM
    • 14,891 Posts
    • 7,496 Thanks
    ACG
    • #5
    • 16th Mar 17, 11:20 AM
    • #5
    • 16th Mar 17, 11:20 AM
    You can not get a Mortgage for half a house.
    If you do not make your payments, the mortgage lender can not come in and repossess half a property.

    I dont mean this to come across as rude, but if your income does not support the loan size you need and your in laws want all of their money in their 70s, they should be able to do that guilt free.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Boicey570
    • By Boicey570 16th Mar 17, 11:26 AM
    • 6 Posts
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    Boicey570
    • #6
    • 16th Mar 17, 11:26 AM
    • #6
    • 16th Mar 17, 11:26 AM
    The mortgage payments on half the house are easily affordable for us, the parents just don't want to sell the whole property, just have us move in with them. They just want to release 50% of their equity in the property, not all of it.

    Also if we bought the whole house, we would probably have to get the house re-banded for council tax which we want to avoid if possible.
    • ACG
    • By ACG 16th Mar 17, 11:33 AM
    • 14,891 Posts
    • 7,496 Thanks
    ACG
    • #7
    • 16th Mar 17, 11:33 AM
    • #7
    • 16th Mar 17, 11:33 AM
    There are lenders who would allow 3-4 applicants to own the property and who will ignore the ages of the eldest applicants if their income is not needed.

    So assuming your income is enoughf ro 50% LTV then all 4 of you could end up on the mortgage, you just make the payments if that is what you agree. The downside is that the parents are now also jointly liable for a Mortgage.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • foxy-stoat
    • By foxy-stoat 16th Mar 17, 12:06 PM
    • 1,563 Posts
    • 859 Thanks
    foxy-stoat
    • #8
    • 16th Mar 17, 12:06 PM
    • #8
    • 16th Mar 17, 12:06 PM
    Which half is the lender going to have as security, top half, bottom half or one side?
    • Boicey570
    • By Boicey570 16th Mar 17, 12:06 PM
    • 6 Posts
    • 0 Thanks
    Boicey570
    • #9
    • 16th Mar 17, 12:06 PM
    • #9
    • 16th Mar 17, 12:06 PM
    The LTV would probably be 30% on the full value of the property, and based on the current rates our mortgage would go down by about £250pcm.
    Would it be best to go through a mortgage broker for this sort of thing?
    I would also like to get a lot of stuff written down in black and white between us and the parents as well obviously.
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