Helping Mum and Dad

sibay

Hello Moneysavers, wondered if anyone could give me a steer.

I am a mortgage homeowner with around 60% equity. My parents are considering a move and I would like them to move closer to me and my family, however as pensioners, prices are around 20-30% more than they would be able to afford by simply trading.

I would be prepared to borrow the short-fall against their new home but not sure what options might be available to us and what considerations should be taken into account, such as contracts, possible returns etc. I have a brother and we'll ultimately be shared beneficiaries so I want everything to be transparent and fair.

My first reaction was to search a mortgage scraper for the best fixed price deal for the next 10 years or so, including income protection since i wouldnt want my mum and dad out on the street i I lost my job!

Has anyone done something similar and be willing to share a few tips?

Cheers and all the best..

:money:

koexelek

I don't know what amount of money we are talking about in pounds, but one option would be for you to raise the shortfall against the property you live in.
You could try getting a further advance from your current lender, or remortgage the whole lot elsewhere to get a better deal.

You would then ideally want to put a " second charge" on Mum & Dad's new place. This could be for either the exact amount of money or a percentage.
For example, if you made up a £20k shortfall on a £200k property, you could register a charge of either £20k or 10% of the property value.
Then, when the property is eventually sold, you get your stake back before the estate is divided between you and your brother.
You should seek legal advice if you go down this route though.

the other option is to have a new three way mortgage on the new house.
A potential issue here is that you would have to have the mortgage in all three names. Don't know how old your parents are , but a lot of lenders have an upper age limit now, so you might be able to take a mortgage over very long a term.

hope that makes some kind of sense and does not sound like a lot of old rambling