Remortgage or Mortgage help needed please.

aimingforadebtfreelife

My parents have their house which has a £25k outstanding mortgage on interest only (property worth £180k). They are approaching late sixties and the bank have called them in for a chat soon about what they are going to do as their rule is 75 years old is max age. They do want to move on in about 2-3 years time as house getting too big to manage. They hope to overpay to chip away at the bal o/s.

Myself and my wife/kids are in rented and rather than see the house be sold to someone else we would like to buy it. My parents have always said once house is sold it would go 3 ways (3 sons) and it has been discussed that I could come on board and my share would mean need to get a mortgage for £120k (LTV 67%).

Now here is my query. Between our savings and my parents overpayments we can clear their mortgage in a couple of years.

I earn £20k year + £10K comes from tax credits, DLA and carers (for my son.) (2 kids total) = £30k year income.

Would it be better for me to make a mortgage application or if my parents sign the house over to me when their mortgage is clear would it be easier to go for a remortgage???? (so I can get the £120k needed to split between my 2 brothers).

Many thanks in advance for any suggestions/help.

GMS

You may struggle to raise 120k on that income.

You are probably better doing a purchase with your parents gifting the deposit. That way you would be buying at the full price (180k) but only need a mortgage of 120k and have a 33% deposit from your parents. If the mortgage is still outstanding at the time you would need to adjust figures accordingly to allow brothers to be paid off.

Most lenders will allow this and the deposit will allow you access to better rates due to lower Loan to Value.

If the property was signed over to you there would be a requirement from most lenders to have owned it for 6 months before applying for a remortgage.

Where will parents live once sold as you have based this on them having no funds from the sale.

As mentioned earlier you are going to struggle with that income, especially as a third of it is made up from non earned monies.

Best to visit a 'Whole of Market' broker to discuss in detail