Remortgage and transfer of house from parents to son

ArnoldS_2

I live with my parents who have a mortgage on the house. The term is coming to an end in 3 months and there will be a shortfall of £80k due to a cancelled endowment policy and insufficient savings. The house value is 400k so they have a lot of equity in the house.

My parents want to keep the house if possible - but they are on a low pension income and cannot get another mortgage. However I work full time with a salary of 28k and I have an excellent credit record with no debts or mortgage.

I plan to remortgage the house in my name. I understand the house can be "gifted" to me and I am aware of the IHT considerations and will have a Declaration of Trust set up to ensure my parents can continue to live in the house after ownership has been transferred.

I have some questions-

1) Would I need to add my name to the house deeds first? As far as I am aware, this is necessary before a bank will allow me to remortgage the house. The current mortgage provider will add me to the deeds subject to an income/credit check. This means there will be 2 mortgage related credit searches in a short space of time - one for the current mortgage, and one (or more) for the new mortgage provider.

2) Once my name is on the deeds, is there anything else I need to do before remortgaging? I presume my parents will be removed from the deeds during the remortgage process?

2) Will Capital Gains Tax or Stamp Duty apply given that I will continue to live in the house with my parents for the forseeable future?

If anyone could suggest any advice or ideas I'd appreciate it greatly.

Thanks in advance.

Dom3663

So its essentially a 320k deposit with 80k mortgage?

I'm guessing the house is big enough for you to live in aswel for the forseable future?
How quick will you be looking to pay the mortgage off? Doesn't this option limit your availability to move into your "own" house away from your parents?

In this scenario I think banks should call a truce with the owner. The bank retains a 20% stake in the house, whereas your parents keep their 80%. When it comes to selling it, the bank gets its 20% back. With a clause that its a minimum of £80k + yearly inflation? Or does something like that already exist??

phlash

Consult an accountant on this one.

There are a few pit falls you need to be aware of. Paying a few hundred pounds can ensure you don't land in one of them.

VIGILANT22

It is important you read this.......

http://www.ageconcern.org.uk/AgeConcern/Documents/FS40Deprivation_of_assets_in_the_means_test_for_care_home_provision.pdf