Getting a mortgage for a house for my parents

Stefn81

My parents own their house outright (value around £100k). They wish to retire closer to me but property prices where I live are slightly more expensive. They would need a house of equivalent size as my younger sister would be moving with them and such a propery nearer to me would be around £130k.

Taking into account moving costs etc, they would have around £90k equity but cannot get a mortgage for the £40k difference due to their ages (they are both of retirement age). They have no savings so we are considering whether my husband and I could get a mortgage for the balance to enable them to purchase the property. We have a mortgage on our own property but our lender is prepared to approve a second mortgage.

I would be grateful if anyone could advise whether this proposal is possible and what the tax implications would be. Should we be putting the house in my parents name or our own?

Thanks.

casualwalks

What about a two bedroom flat instead of a house? Would they be able to afford a flat outright?

McKneff

How hard have they tried to get a mortgage, being of pension age doesnt exclude them with every lender.

It's not as if its a fortune nowadays.

catfish50

Be aware that if either of your parents need care in the future, if they aren't able to self-fund, they'll be assessed for contributions towards the cost of their care. This could have implications for any property which they own or part-own. This can't be avoided just by putting the house in the name of other family members, as that could be treated as deprivation of assets for the purpose of claiming benefits.

There's a useful leaflet about it at Age UK. https://www.ageuk.org.uk Click on the section about Home & Care