How do I take over the whole Mortgage

bbchamp03

Ok the current scenario is as follows,

I am in a joint mortgage with my mother.

What we would like to do is for me to take over the entire mortgage, the theory being that I am 25 years younger and earn more money I should be able to get a better mortgage than our current rate and it free's up my mother to travel etc

What are the logistics of this, if it was signed over would it be considered a gift and mean that I would be liable to capital gains/inheritance tax?

Its only a 2 year old mortgage with very little paid off, 50k on a 180k mortgage?

This is very much in the storming phase, what I would like to do is remortgage down to 25/30k and have it under my name, so my Mother can realise 20k to enable her to travel and etc

I realise this may be completely infeasible and full of holes,!

BoGoF

I'm having difficulty following the last part.

How are you going to remortgage down to 25/30k and realise £20k for your mother?

Browntoa

you need to earn enough to cover taking the mortgae out on your own

legal fees to cover transfers of title

"gifting" would be subject to tapered tax liabilities over 7 years

bbchamp03

BoGoF wrote: »

I'm having difficulty following the last part.

How are you going to remortgage down to 25/30k and realise £20k for your mother?

Sorry it may be difficult to follow as what I am suggest may not be possible (this really is an area I am completely clueless).

If I owned the entire house that had £50,000 paid off could I re mortgage it using only £30,000 and take £20,000 out?

headoutthesand

Do you mean remortgage for £70,000 and give your mother the £20000 difference to travel? In turn meaning that you only have £30,000 paid off instead of £50,000

bbchamp03

Browntoa wrote: »

you need to earn enough to cover taking the mortgae out on your own

legal fees to cover transfers of title

"gifting" would be subject to tapered tax liabilities over 7 years

Thanks for that, I have done some research on this so if my mother is around (I could not reword this to sound any better) for the next 7 years and is in residence at the address I should not incur any tax if this is the only gifted inheritance within this period?

Would I need to see a conveyancer to transfter the title? and do you knw what would the approximate cost would be?

The house is approx £160k (I would have this revalued prior to any arrangements),

So once the title is changed to me and legal fees are paid, the next thing would be for me to look to remortgage.

But in what order as the existing mortgage is due for renewal and at present we are both listed on a joint mortgage?

Thanks for the help so far!

bbchamp03

headoutthesand wrote: »

Do you mean remortgage for £70,000 and give your mother the £20000 difference to travel? In turn meaning that you only have £30,000 paid off instead of £50,000

Yes that is what I meant, I am sensing this is a bit far fetched?

bbchamp03

Would it be a case of

Signing deed over? (what is the process and likely costs)

Applying for a mortgage by myself, 130k + 30k from the 50k that is is already invested in the house as a deposit, therefore releasing the additional 20k?,

Soot2006

If the house is worth £160,000

You probably won't be able to remortgage for £150,000 (your £130,000 owing + extra £20,000 that you want to give your mother to travel).
The mythical £50,000 you keep referring to doesn't truly exist; not in cash format.

Thrugelmir

bbchamp03 wrote: »

Thanks for that, I have done some research on this so if my mother is around (I could not reword this to sound any better) for the next 7 years and is in residence at the address I should not incur any tax if this is the only gifted inheritance within this period?

This is known as a "gift with reservation". In that your mother enjoys the right to occupy the property. So IHT is still liable also the mortgage lender may not be agreeable to such an arrangement.