2nd Mortgage. Help and advice needed

hazbow

My parents currently have a mortgage with about 10 years left. I'm 21 and currently live with them however I want to move out and we have an idea to help.

My parents will get a second mortgage to get a second home (but effectively my home). I will live there and pay them, who will then pay the second mortgage. After a number of years, we will sell the property, pay off the second mortgage completely and any remaining equity (hopefully quite a bit) will be given to me. Which I can then use as a deposit to get my own mortgage.

What implications/issues are we likely to face? Would my parents have to declare it as a second income?

any help and advice on this would me much appreciated. Thanks :-)

hazbow

anyone?

feisty1

Are you not in a position to apply for a mortgage with yr parents providing you with the deposit?

hazbow

unfortunately not, hence the reason for thinking of doing what i've mentiond above

feisty1

Yes, their are all sorts of implications but that doesn't make it impossible..........Yr parents are best consulting an independent adviser

herbiesjp

hazbow wrote: »

unfortunately not, hence the reason for thinking of doing what i've mentiond above

But they will need a deposit for this second purchase

Can you give more detail on the figures as to how you would want this to work?

hazbow

herbiesjp wrote: »

But they will need a deposit for this second purchase

Can you give more detail on the figures as to how you would want this to work?

Could they get a second mortgage at 100%? I very much doubt that I myself would be able to get a 100% mortgage in current climate, but they might as they have good credit history.

How I would want this to work is they get a 100% mortgage to buy a second home. I would live in that second home and pay my dad "rent" equivalent to the monthly cost of the mortgage. Then pay all other bills and expenses myself.

After say 5 years, we would sell the house, pay off the mortgage completely that was taken out for the house and any remaining equity would go to me.
I would then use that, plus any savings I have saved in that time to get my own mortgage and hopefully and decent one as I would have a good deposit.

My parents neither gain or lose anything except me out of the house.

herbiesjp

Only one probelm -there are no 100% mortgages

Conrad

They could get a buy to let mortgage say at 75% on the new place, with 25% deposit raised against thier existing home.

Another option is 10% deposit and buy as a second 'intended' home for them.