Are parents too old for mortgage??

swishy_2

Hi all,

I'm new to this site so please be nice!

I am currently looking at buying a house and due to bad credit from being a silly student I have a zero chance of getting s mortgage in my name at the moment.

My parents have offered to help out any way they can. They have a home worth 400k with no mortgage. I am looking to buy a starter home which are around 150k in my area.

My parents have offered to buy the home for me cash by raising a mortgage against their own home if possible. I will then make repayments to them.

I want to know if this is possible. My mum is 58 and looking at retiring in 5 years. She currently earns 35000. My Dad is a 62 year old retired civil servant. Thanks.

Running_On_Empty

Hello newbie Swishy
The Coventry Building Society's max age is 80, I believe, for end date of mortgage. I don't know about other lenders as my mortgage is with the Cov.

Senior_Paper_Monitor

Its probably do-able (subject some other issues).

Its understandable.

It has horrible implications if not done responsibly and with professional advice.

Please see this thread to get an understanding ......

https://forums.moneysavingexpert.com/discussion/2705261



....... and please pay more attention than that OP (as I'm sure you will).

Let me sum up the content .... It may be possible, it is fraught with secondary and tertiary potential issues (for all parties) and you MUST GET PROFESSIONAL ADVICE.

CLAPTON

swishy wrote: »

Hi all,

I'm new to this site so please be nice!

I am currently looking at buying a house and due to bad credit from being a silly student I have a zero chance of getting s mortgage in my name at the moment.

My parents have offered to help out any way they can. They have a home worth 400k with no mortgage. I am looking to buy a starter home which are around 150k in my area.

My parents have offered to buy the home for me cash by raising a mortgage against their own home if possible. I will then make repayments to them.

I want to know if this is possible. My mum is 58 and looking at retiring in 5 years. She currently earns 35000. My Dad is a 62 year old retired civil servant. Thanks.

why do you have zero chance of a mortgage?
who have you asked?
what is your deposit?
what are you debts?
what is your salary?
why do you need a house now that is worth threatening the security of your parents last 30 years of life?

swishy_2

Thank you for your replies.

We will definitely be seeking expert advice should we choose this course of action.

Can I ask: would it be possible for my parents to get a mortgage against the new house (with a deposit) so that it wouldn't be against their current home? Would this be a better option?

Clapton - thank you but I really don't want to go in to all my details if only because it would be wasting your time - I have looked into it and it's not a possibility right now. I don't need a house, I want one like everybody else and my parents are willing to help so we're looking into it hence me coming on here.

Annisele

swishy wrote: »

Can I ask: would it be possible for my parents to get a mortgage against the new house (with a deposit) so that it wouldn't be against their current home? Would this be a better option?

Probably possible (depending on your circumstances and theirs), but also a minefield. For starters, it wouldn't be their main home, so they'd probably have to pay capital gains tax when you sell. It would also be a 'buy to let' (ish), but for a dependant family member - which might seriously restrict your choice of lenders. And (again, depending on your parent's circumstances) it might produce income tax liabilities for them.

I can absolutely understand why you don't want to disclose everything there is to know about you and your parents on a public forum (I wouldn't either!) but the whole thing is fraught with so many potential difficulties that both you and your parents really need professional advice from people who know your circumstances.

I very much doubt that there's a single 'best' option; you'll have to weigh up the advantages and disadvantages of all of then and then choose. And without knowing all of your circumstances, it's hard even to say what all of the options are - the 'why can't the OP get a mortgage' thing makes a difference in my view; if it's something that's going to go away in a few years then it might be better to wait rather than entangle your finances with your parents' for years.

themull1

I don't think its a good idea to mix your finances with your parents, i think you should wait until you can get a house yourself.

getmore4less

You need to give more details if you want any kind of informed comment.

For afordability

What are the pension incomes of both your pension.
What's your income?
What are your current debts.
How big is your deposit.

For pracicality

Deaths
Deaths of any one of you needs to be considered and appropriate cover

Loss of income(mainly you, pensions tend to be secure)
How will the debt get paid.

Tax
Income tax if you pay them money
CGT if they buy the house and don't live in it
IHT and their estate planning will need to be looked at.

Trust.
Money and family often are the cause of family breakdowns when something happens that breaks the trust.

Sensible thing would be to sort out your finances and start looking in a few years.
It won't take long to sort out the mess and you can get decent deals again.

If you don't have your own depsoit or still have debts then it is time for a rethink.

swishy_2

There is so much to consider, I know. We won't be rushing into anything.

My grandfather will be putting forward a deposit towards the home up to a maximum of £25000.

I plan to keep the home and not sell on during my parents lifetime.

I would like more detailed advice re the implications of either my parents raising the money against their home or buying the new house with a mortgage against that.

I would appreciate any expert advice on that. Please let me know if I need to provide further details to assist with that advice specifically.

Thanks again for all your help

fathippy

My suggestion here is as follows. Try your hardest to keep the house in your own name so that it is your Principal Residence, and most tax efficient. Use the gift from grandparent as a deposit, and take the mortgage on yourself, using your parents as guarantors. This may involve trawling from one lender to the next, or finding a bespoke product, but it is probably best in the long run. If you feel that your combined ability to pay is good enough for your parents to take the mortgage on, it ought to be good enough for you to do so with guarantees.

swishy_2

Thanks fathippy although I was under the impression that with my credit rating being poor it wouldn't matter if I have a large deposit or my parents agree to be guarantors I wouldn't get a mortgage on the rest of the property. At least thats what London and Country brokers seemed to think when I spoke to them