Buying with a parent...

harry-m_2

Hi
I am looking to buy a property in London... my father is kindly offering to buy half the house in his name, so I plan to get a mortgage for the remainder of the value of the house with a smallish deposit of my own.

This is great, and we have found a property. I have spoken to a broker and he has found a variable rate repayment mortgage with Nationwide. He also said that he was limited in choice as not all providers are happy with another person having a claim on the house, if for example I defaulted on the mortgage, repossessing the house would be more difficult with my father being on the deed and having a 50% interest.

This was proven out when I spoke to First Direct this morning as they were not happy with the above situation. I have found better rates than the 2.74% (variable) for two years, going up to 3.99% (variable) after this 2 year period, but I don't want to keep encountering the same issue that I had with First Direct.

so, my question is - has anyone else been in a similar situation to me, and does anyone know of providers who would be happy with this situation, as I would like to compare my options. Having looked on Moneysupermarket, there are plenty of providers with lower variable rates.... obviously, the LTV is going to be less than 50% due to the money my father is putting down.

I'd appreciate any response
Thanks
H

emmadragon

Hi,

I am on my mortgage with my Dad and they only problem I had was his age, I've had to reduce to term because it would go past his 75th birthday. I think the best thing to do is not to offer up the information that he is your dad, they don't actually need to know your relationship as far as I remember, I just said to both my broker and mortgage company that this is the other person on the mortgage and they live at a different address.

By the sounds of things you have a good LTV rate, esp for London and so just shop around and haggle. If yours and your Dad's credit rating is good then there is no reason to penalise you.

Good luck,
Emma

Conrad

emmdragon - I think in your case you have a joint normal mortgage but in the OP's case he I think is describing a different scenario where father does'nt want to be on the mortgage but merely wants his own 'private' charge over 50% of the equity and wont be living there.

OP - usualy people just buy in the one name or in full joint names like emmdragon. There is an alternative to these 2 options but it's pretty complex so you might want to try another broker.

Good luck

CLAPTON

I'm surprised any lender would consider the deal as the house is virtually unsellable if you defaulted.
Would he consider being on the mortgage in the conventional way i.e. joint owners and joint mortgagees?

also note that when you sell the property in a few years, his half will be subject to capital gains tax unless it's his primary home.