Best way for mum to help me get on the housing ladder

hebridies

My mum would like to help me get onto the housing ladder. She doesn't have much in the way of savings. She has about £10k left on her mortgage and her house is worth about £160K. I have no deposit or savings.

We have been thinking about ways in which she might be able to help me and are wondering about buying a flat together, but neither of us know much about mortgages etc. There are a couple of different ways this could work and I'm just looking for some advice on different approaches. Ideally, this would be a bit of an investment for mum too as I would hope to be able to buy her out at some point and would _hope_ to see some increase in house prices by this time so she would get a bit of a return (note - we are looking to buy in an area earmarked for development).

In terms of getting finance for a flat is it more viable in these circumstances for my Mum to remortgage her existing house to raise a deposit / the purchase price of the flat (roughly £70k) or can she use the equity in her house to help us get separate mortgage for the flat (even though we don't have a deposit)? Or is there another way of doing this?

And, in terms of me doing my bit, what is the best way? What are the bonuses / pitfalls of:

• Taking a mortgage out in both our names / just her name?
• Splitting all costs and any increase in value straight down the middle? (Though she is the one taking on more of the risk)
• Me taking on responsibility for paying the mortgage myself? (Can I then 'earn' a percentage of the house plus half of any increased value?)

If it makes a difference, we both work f/t and my mum is in her early 50s.

I know there are lots of other things we need to take into account, such as thinking what would happen if, for any reason, either of us were unable to meet mortgage payments through illness or lack of work, but it would be good to look at the basic options that may be available first.

ETA: We have done the calculations and can afford the mortgage repayments on the kind of flat we are looking at - we have also looked at how an interest rate rise would affect us. ta

Thanks

Hebridies

LandyAndy

hebridies wrote: »

My mum would like to help me get onto the housing ladder. She doesn't have much in the way of savings. She has about £10k left on her mortgage and her house is worth about £160K. I have no deposit or savings.

If it makes a difference, we both work f/t and my mum is in her early 50s.

Thanks

Hebridies

What makes you think you can afford to run a second house and make additional mortgage repayments?

hebridies

LandyAndy wrote: »

What makes you think you can afford to run a second house and make additional mortgage repayments?

It wouldn't be a second house for me. I would live there and pay the mortgage instead of paying rent. My mum's income would allow her to pay part of the mortgage if that's the option we went for. I should maybe have said 'she doesn;t have much in the way of available savings'.

Hebridies

poppysarah

The best thing your mum can do is encourage you to keep saving and let you live at home.

The ladder isn't worth getting onto at the moment unless you have a huge deposit and earn shed loads of money.
Yes it is utterly wrong.

Have a look at how many BTL properties your own MP has gathered for himself during his time in office.

hebridies

poppysarah wrote: »

The best thing your mum can do is encourage you to keep saving and let you live at home.

The ladder isn't worth getting onto at the moment unless you have a huge deposit and earn shed loads of money.
Yes it is utterly wrong.

Have a look at how many BTL properties your own MP has gathered for himself during his time in office.

Thanks - but I live at the other end of the country from my mum so it would be a bit of a commute to work...

Hebridies

poppysarah

Well just save until you can do it without your mum needing to help. Seriously make your own financial decisions based on your income and abilities.

Yes it sucks houses are so dear.

VIGILANT22

So many factors involved here, have you not thought about taking professional advice on this?

hebridies

VIGILANT22 wrote: »

So many factors involved here, have you not thought about taking professional advice on this?

Yeah - we were thinking of taking professional advice on this one but just wanted to see if I could get any useful info on here first to help me think things through (way off making a decision on this one yet). But maybe I'll just go straight to the professionals.

Thanks Vigilant22

poppysarah wrote: »

Seriously make your own financial decisions based on your income and abilities.

Yes it sucks houses are so dear.

I don't actually think the house prices in my area are that bad. And I am making my own financial decisions - I don't think it's a bad thing that my mum wants to help me. I am very grateful to have that possibility and think that people should make th emost of the opportunities they have.

Hebridies

VIGILANT22

You will get varied "opinion" here which will just confuse you........you dont make a decision and then see an adviser...it's like saying I am going on a diet before I go to Weighwatchers!!...........good luck

CLAPTON

We need some relevant facts here

ignoring the deposit for a moment

-how much mortgage can you raise on your salary?
-how much is a suitable property?
-do you have any debts?

poppysarah

hebridies wrote: »

I don't actually think the house prices in my area are that bad. ....

people should make th emost of the opportunities they have.

If they are "not that bad" then please do not accept any financial help from your mum.

People should make the most of the opportunities they have - and for your mum she should concentrate on finishing her mortgage not looking at extending her debt to help someone who doesn't need help onto the ladder.

There are too many unknowns for your mum to put debt into her name to help you. She doesn't have savings - so how can she realisticly sensibly help you?