Buying half a house from GFs Family

gallaghb

Hello, am hoping someone can help with the below

My girlfriends Dad owns 3 houses, 1 he lives in permanently and the other 2 have been empty for about 5 years and are currently being renovated for me and his daughter to live in 1 of them. The plan was for us to rent it from him but he now needs to release some cash so that he can renovate the 3rd house.

The house is worth approx £400,000(couple of years ago), he has a mortgage on the house of approx £200,000. He is interested in selling us half the house for approx £200,000, we have 20-25% of this amount for a deposit.

He obviously wants to retain half the house but be mortgage free on it. We wouldn't need to pay him any rent on his half. How would this work legally? As I'm thinking no lender is going to give us a mortgage because if we defaulted he would be entitled to his half. The only way I could see it working is if my girlfriend and her dad got a mortgage on the house together?

I reckon we need to talk to a solicitor but we're not quite ready to go down that route yet.

Thanks in advance!

Ben

CLAPTON

indeed so

the mortgage company would require all people on the deeds of the property to be on the mortgage

gallaghb

Thank you.

If myself, gf and her dad went in on a new mortgage for the property is their something than can be drawn up to say we own 50% (25% each) and dad 50%. Or does that just go on the deeds?

Also would the above just be treated as a remortgage? Even though there are 2 additional people on the mortgage now?

I read that 3 person joint mortgages are available, can anyone point me in the right direction as I can't really find any!

CLAPTON

you can own the property is any proportion you want.. you need the ownership to be tenants in common.

you would need to ask the mortgage company but I would think it would be a new mortgage and ask them about three people on the mortgage

you should be aware that presuming the dad won't be living there, when (if) you sell the propeety his share ill be liable to cpaital gains tax.

similarly when he gives/sells you a share then he will need to pay cpaital gains tax too as this will count as a disposal for cgt purposes.