getting a mortgage with parents?

getmore4less

Locoblade wrote: »

There's a few flaws in your plan though, in your later years you'll continue to pay rent at the market rate as opposed to being mortgage free, or at worse paying a mortgage that has monthly repayments based on affordability 20+ years previous (ie cheaper), therefore a renter will in a far worse position to enjoy their retirement even if the buyer can't release euquity from their house whilst living there. My mum has just finished paying the mortgage on her 3 bed semi in Sussex, the mortgage when she was actually paying it was under £100 a month - rent on the same property would be £800-1000 a month at present rates. Mortgage repayments don't last for a lifetime, rent does. Mortgages also generally become cheaper in relative terms as the years go by assuming inflation isn't at a standstill over that entire time, and your earnings will be significantly more in 20 years than they are now.



If you rent you're basically buying a house for someone else anyway (your landlord), possibly several times over, so does it really make much difference? If the government getting their hands on your money after you die concerns you that much just leave a will and donate the proceeds to charity.

I wouldnt necessarily say that now is a good time to buy though, and in the current market renting would certainly be a better short term option than dropping into negative equity with falling house prices, but if you're planning to rent for life for financial gain, I fear you may lose out significantly. :rolleyes:

A significant portion of buying a house is renting the money, If you invested the capital elsewhere rather than creating the equity you build up a pot that pays the rent. another significat cost of owning is alow ignored you have to fix the place put that into the numbers.

If you save a lot the interest you get (tax free in an ISA) can/will be enough to pay any rent except you have the money in the bank and not stuck in a house.

As you get older you just spend the money and when it runs out the goverment pays your rent for the latter years that you can't realy spend anyway.

One option is to buy then sell to rent later but this causes the pot to be taxed so not so efficient.

Another option is to spend/hide the money, then you get your rent paid and still get to spend it.

The anecdotal evidence is that a lot of old people cannot actualy afford to live in the places they bought so they become rundown, rent and the place gets rundown you move into a cheap brand new BTL muppets place who will be subsidising you.

Long term renting is viable look at how many do it, leasehold is just a long term rent.

sjaypink

yes i guess it would perhaps be easier to ask family for the deposit, just interested in this as an alternative because several friends have done it so i assumed there was an advantage. i think the obvious advantage for us is that its not actually asking them for anything financially, just the use of their names iyswim. i will ask my dad to mention it to his fa next time he sees him anyhow.

i appreciate the thoughts on renting (pros/ cons). we are renting from a housing association at present, so the rent is reasonable and theres no huge importance to move- secure tenancy etc. just that we would like somewhere a bit bigger. we have been told we can do a loft conversertion here, subject to pp (could get it done very cheap, family/friends are all tradesmen), but obviously thats just adding value to someone elses property! only other option for a larger place is to rent privately, but that would involve 6 month tenancys, and no security for the kids.

thankyou all for your replies.

damanpunk

Hi, sounds like you want to do similar to what I did. My income was too low when I took out my mortgage so my mum did a joint application with me. All the payments etc come out of my account but my mums income was taken into account, she'll also be liable for payments with me. Once my fixed rate period ends the property will be re-mortgaged, her name taken off and my girlfriends added. I would really only recommend this if you are guaranteed that your income is going to rise. There are other options where you can have a parent as a guarantor but I'm not sure if these still exist in the current market.

sammyjammy

dux001 wrote: »

If, like me, you will never have any children to leave it to, you are effectively buying a house for the state. No thanks.

Speak for yourself, I have a thing called a will, I can leave my house to whomever I want, when I get old and grey if I need help I shall sell said house and pay for a luxury care home

choccybuttons

Hi

I have a joint mortgage with my FIL as hubby has non-proven income. The parents don't have to go on the title deeds but they have to get legal advice on this. My mortgage is with the bank of ireland but I know similar deals with nationwide etc. I went through a mortgage broker. The only thing is that your financially linked the parents so if you have bad credit or missed payments this will have a massive knock on effect on their credit score. Hence both parties have to have legal advice.