Sell House but Keep Mortgage?

TheSaturdayBoy_2

Hi,

First Post so go easy on me.....

Not sure whether I should be posting this here or in the house buying forum so I apologise if I've chosen the wrong one....

We've been trying to sell our house for £180k (mortgage of £90k) and we've just accpeted an offer for £160k. As we've not seen anywhere to buy we're considering renting for 6-12 months and just keeping an eye out for something.

The problem I have is that our mortgage is a portable collarless tracker at base rate so we're currently paying 1.5% interest. Because of this, we'd like to keep the mortgage.

Does anyone know if it would be possible to buy my parents house (which is they own completely) for £110k and port our £90k mortgage. They would continue to live in it. Then when we find a property they could buy it back at £110k.Are there any legal issues to this?

I realise we would have solicitors fees to pay but I'm sure they would be far cheaper then the £900 mortgage fee redemption fee + any arrange fee on a new mortgage + the savings in interest payments.

Any comments or advice would be greatly appreciated.

Thanks

TheSaturdayBoy

dwsjarcmcd

I think the main issue is that you would need a BTL mortgage to buy your parents home, not the one you've got. I doubt your lender would agree to this, although you could be up-front and ask them about your plan.

TheSaturdayBoy_2

What if I wasn't letting it? or would I have to?

I did ask the building society about it and they suggested I seek legal advice.Just wanted to ask the experts here before I speak to a solicitor.

Thanks

koexelek

TheSaturdayBoy wrote: »

What if I wasn't letting it? or would I have to?

Depends on the lender. Some lenders will be OK with youbuying a house for your relatives to live in, as long as you don't charge them rent and your own income covers it.

Also note, 99% of lenders will not allow you to have a buy to let mortgage and let it out to relatives.

fatgit

TheSaturdayBoy wrote: »

Just wanted to ask the experts here before I speak to a solicitor.

Thanks

:rotfl:

i like

TheSaturdayBoy_2

Thanks koexelek

What about the whole buying it from them and then them buying it back at the same price. It sounds a bit dodgy........but thinking about it I'm not quite sure why?

Thanks

beecher

I thought I read on here that some lenders will keep a portable mortgage available for 6 months. Apologies if this isn't true, but maybe someone could confirm if it is an option.

Maisie11

Nationwide told us that if we sold and didnt buy for 6 months they would keep our current mortgage on 'ice'. Even after six months they would look at things on a case by case basis. I think you could do a lot worse than putting your cards on the table with the bank and telling them what you are planning to do. They must know that a sizeable miniority of people are selling and then renting for a while.

Conrad

Problem here is you dont say, which, lender you are with, so we debate all day long about hypotheticals, when EVERYTHING depend upon your existing lenders criteria.

Note also that the LTV that applies to your parents home is 81.8%, so you need to find out if the there is a maximum LTV limit on your mortgage, for example; It might have a 75% max ltv, in which case you would have to partially redeem the mortgage to match up the ltv.

Youre best bet to be frank is for you to ask your existing lender.

koexelek

TheSaturdayBoy wrote: »

Thanks koexelek

What about the whole buying it from them and then them buying it back at the same price. It sounds a bit dodgy........but thinking about it I'm not quite sure why?

Thanks

Not dodgy, but will cost you both in solicitor fees each time

TheSaturdayBoy_2

My Lender is Darlington Building Society.

Not too sure what the max LTV is? Is this normally product specific?

Also, when porting a mortgage are you essentially just applying for a new mortgage but porting the conditions of your current mortgage?

Thanks