Remortgaging a property you don't own?

skintandscared_2

Hi there,

I wonder if anyone can give some advice please.

Briefly, my parents own their property outright. They recently looked into equity release schemes as they would like to free up some cash from their property but don't want to downsize. Thankfully they have realised that, financially, equity release is a really bad idea. There are 3 of us siblings who want to try and help our parents without them losing a huge chunk of the value of their home. At the moment, my brother is the only one in a position to do anything really.

Is it possible that my brother could obtain a mortgage on our parent's property, give them the money and then own a part of their house? Unlikely I'd imagine. What about taking a loan and putting a charge on their house? Would that be allowed?

Any suggestions as to how my brother can assist my parents release some equity from their home, without the bank getting a huge chunk of the rest, would be gratefully accepted! Thanks.

kingstreet

The only people who can borrow against a property are its owners. Your parents could raise a mortgage, but this may prove difficult if their ages are at, or near, the lenders' maxima.

One of you buying a share from them falls foul of this again, as all the owners would need to be party to the mortgage.

One of you could borrow the money and loan it to them, taking a charge on the property in return. If security is needed for the loan, you'd have to provide that yourselves though.

Only other option is one of you buying a share of the property for cash, but that means you have to have the cash, or be able to raise it separately again.

skintandscared_2

Many thanks Kingstreet. I did wonder about them re-mortgaging, with us children making the actual payments for them, but they are 70 and 67, both retired, and probably not able to re-mortgage on that basis anyway I suspect.

We will have to see if my brother can get a loan and put a charge on their property. Hopefully I can do the same thing in a few years when my DMP has long since finished!