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Buying parents house
nadine12
Posts: 48 Forumite
Hi can anyone give me some advice on the financial side of this please.
We are buying my parents house off them as they are moving into my grandfathers home as he passed away earlier this year. The house was valued last year at around £165 k, I would say its worth around £150 k ish in the current market based on others for sale in the street. My parents are asking for enough to cover their mortgage plus £10k, so around £135k altogether (obviously this would also depend upon what surveyor says re value of the house).
We have put our house on the market today for £120k and are hoping to hold out for the asking price, considering that it was valued at £130k this time last year. We would need around £115k to clear our debts so will not be making much profit.
It all gets a bit complicated now as we are both in fixed term mortgages, and would ideally like to avoid the early redemption fees. Ours doesn't end til 2010 and would cost around £3k in early redemption fees, my mums ends next July and would cost a staggering £8k to pay off early last time she checked.
Our mortgage itself is with Northern Rock (oh dear) and totals about £96k, the rest is a secured loan with GE Money.
Would like some advice please on whether it would be an idea to port the mortgage until fixed term is up and borrow the rest (which means my mum would also have to port hers til July although we could give her the sale proceeds immediately), get a completely new mortgage and pay the fees, or as someone else suggested effectively 'rent' from my parents until their fixed term is up in July. We are a bit wary of this as we would effectively be steppoing off the property ladder. If we port the existing morgage, is it possible to get a second loan for such a large amount?
Also not sure how it works with a new mortgage, although we won't have cash as such to put down, does the equity in the property count as our 'deposit'?
Finally, on the conveyancing side of things, which bits need to be done considering we are buying privately from family?
Sorry this is so complicated any help would be appreciated!
We are buying my parents house off them as they are moving into my grandfathers home as he passed away earlier this year. The house was valued last year at around £165 k, I would say its worth around £150 k ish in the current market based on others for sale in the street. My parents are asking for enough to cover their mortgage plus £10k, so around £135k altogether (obviously this would also depend upon what surveyor says re value of the house).
We have put our house on the market today for £120k and are hoping to hold out for the asking price, considering that it was valued at £130k this time last year. We would need around £115k to clear our debts so will not be making much profit.
It all gets a bit complicated now as we are both in fixed term mortgages, and would ideally like to avoid the early redemption fees. Ours doesn't end til 2010 and would cost around £3k in early redemption fees, my mums ends next July and would cost a staggering £8k to pay off early last time she checked.
Our mortgage itself is with Northern Rock (oh dear) and totals about £96k, the rest is a secured loan with GE Money.
Would like some advice please on whether it would be an idea to port the mortgage until fixed term is up and borrow the rest (which means my mum would also have to port hers til July although we could give her the sale proceeds immediately), get a completely new mortgage and pay the fees, or as someone else suggested effectively 'rent' from my parents until their fixed term is up in July. We are a bit wary of this as we would effectively be steppoing off the property ladder. If we port the existing morgage, is it possible to get a second loan for such a large amount?
Also not sure how it works with a new mortgage, although we won't have cash as such to put down, does the equity in the property count as our 'deposit'?
Finally, on the conveyancing side of things, which bits need to be done considering we are buying privately from family?
Sorry this is so complicated any help would be appreciated!
0
Comments
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Hi Nadine12 your post is long and complicated so sorry if I've missed the point!
I would say if you are buying Parents house and they are moving to 'free' Grandparents house then can you all port your fixed term mortgages and put the extra money wanted as IOU's (not sure how legal this would be) until fixed terms are finished?
Otherwise could you rent out Grandparents house until 2010 then look at doing house chain again?0 -
Can any one else offer any advice on this please...?0
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