advice on complex house move pls!

Brodiebobs

Hi.

I'm looking for a bit of advice/guidence for a situation we have found our selves in!

Background
We bought at the peak of house prices 2007, paid 95k for a house then paid around 15k doing it up. Quite lucky as we had a good deposit so 'only' have a 80k motgage which we are currently trying to overpay. Houses arent selling at all here, one two doors down has been for sale for 6 months reduced considerably to 80k and has only had 1 person even look round, no offers.

My parents have a nice house, good area nearer my daughters school that they want to sell, again not many sales by them, but is far too big for them now we've all moved out and they want to sell up and move to a cottage in the country.

In an ideal world we would buy from them, but we know on our incomes we wouldnt get a mortgage for their house recently valued at 160k. My parent have money for a deposit and bank said most they'd lend them is 120k as they are both so near to retirement (8 years) they have their eye on cottages around 180-200k.

After my drivel... the main point would be would a lender consider us all for some sort of arrangement where we could let our our property (an agent quoted £500 month) we move into parents, come to some agreement about paying rent towards the cost to them or taking as much of a mortgage as bank would lend and buy the rest later, my dad has also suggested letting us have it for 110k, but it still leaves the problem of what we do with our house and getting a mortgage! :mad:

Pee

Whatever you do, make sure it is tied up legally to avoid any problems in the future.

Would it be an option for your parents to rent? If they don't know the area they are moving to, this would probably be a good idea. In the meantime you could move into their house and let your house out. The rent should cover the mortgage and you could pay rent to your parents for their house - depending on their tax position.

You could look at making a final decision in 2 years time, when you may be in a position to move forward.

Brodiebobs

thanks for your fast reply.

My parent have considered that actually and looked at a few but i think they would like the 'security' of knowing they owned it, more my dad than mum!

I knew we would have to go through a solicitor to get it all done officially, we do all get on fine but you never know whats round the corner!

VIGILANT22

[QUOTE=Brodiebobs

You need to take professional advice on this as you do have a few options but should be aware on the implications..........

getmore4less

VIGILANT22 wrote: »

You need to take professional advice on this as you do have a few options but should be aware on the implications..........

Why not highlight some of the issues?

VIGILANT22

getmore4less wrote: »

Why not highlight some of the issues?

The clue is in the title "complex"

Brodiebobs

VIGILANT22 wrote: »

The clue is in the title "complex"

I do realise its complex but thats why i'm asking the advice on here to get an outside point of veiw... and to see if anyone had experience/advice to offer.

VIGILANT22

and because of the complexity of it... my opinion is you should take profesional advice..you could buy yr parents house and they have a 2nd charge over it..this has implications which are not easily posted on a forum.....you could buy at a reduced price....we dont yr parents financial situation...as this could have an impact on them.....again not the easiest to write on forum...If and when seeking professional advice.... the overall financial situation of 2 sets of people would have to be understood before any recommendation was made....ie parents selling a property at undervalue could later impact on them..but their personal position would have to be understood

By the way it is opinion on this forum and not advice as the site is not regulated.....

Annisele

Not sure you've given enough information.

You have effectively no equity (and might be in negative equity). I'm guessing no savings given that you say you've been overpaying on your mortgage.

You don't say how much equity your parents have. They will need £60k - £100k ish over and above the sale value of their house to buy their new property - do they have savings to finance that?

You also don't say what your income and your parents income is. I'm not a mortgage adviser, but other peeps might be able to give you more help if you give them at least some of the following: £ you have in savings; £ your parents have in savings; your income; your partner's income; your parents' income; equity in your parents' house.

If your parents sell their house to you for £110k, then they would have sold at an 'undervalue'. Possible inheritance tax implications there, also google "deprivation of capital" (I think Age Concern decent info on that, but too lazy atm to find the link).

I suspect that the reason houses near you aren't selling at all are because they are overpriced. What is the rental market like? Assuming you could get consent to lease (which is by no means guaranteed given your LTV) is it likely you could get tenants at rate high enough to cover the mortgage (bearing in mind as a LL you'd probably pay higher rates)?

Brodiebobs

annisle, to answer you questions!

parents own the house outright, no mortgage, they have savings but i'm not exactly sure how much not really my business, but know its definately over 20k.
dont know their income but as mentioned in first post they have already been offered a mortgage of 120k from their bank.

We have savings not alot though about 3k earn around 20k between us a year but i'm taking on more hours from may so will increase to around 25k. The reason we are overpaying the mortgage is to try and increase the LTV primarily because our fixed rate ends next year so will have to shop around for a new mortgage, but obviously this will help if we have to get consent to let.
We would get a decent amount if we were to let already had an agent look and they said £500 at least maybe £550, next door to us pay £600.