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Getting mortgage with Parents
malkom
Posts: 10 Forumite
Afternoon all,
Straight to the question would be. is it possible to apply for a mortgage on my parent's house with them?
As background, they own their property outright (approx. value £700k) and are both semi retired and hence don't have a large income. I make £42k pa (very stable job) and am debt free with a good credit history and currently rent in the extortionate London market with my partner paying £310 per week for our one bed flat. My partner currently works self employed as a locum dentist and has about 18 months accounts at around £80k pa. She's looking to move to London to a permanent post which would likely be around £60-70k pa.
The obvious solution for buying a house is to save for the deposit which we've just started to do. Realistically we're looking at a couple of years to get to £25k for a 10% deposit plus another £5k for fees, more if we don't have to dip in for emergencies. If this is what we have to do, fine, I'll be back in a couple of years asking for more advice!
On the other hand, I'd rather not be paying the rent I do. If the interest on a £250k mortgage is £833.33 per month then we're paying £500 more than that in rent in a rental market rising above inflation. My parents have very kindly agreed to help me in pretty much any way they can and the most likely solution is getting a remortgage to help with a deposit. As they currently don't have a great amount of income they wouldn't be able on their own to get a particularly large mortgage. Given I'll be paying for it all anyway I'd rather they could get sufficient to enable me to get a higher deposit and access to better rates. In an ideal world they'd be able to mortgage their own property, still at a low LTV for me to be able to buy mine outright. If we could apply to remortgage their property with my income on the application it would make sense to be able to get a larger mortgage, hence the question.
The idea sounds a bit too good to be true though hence my asking advice on whether it is at all possible here.
Many thanks for any advice you can give,
Yours in expectation of being shot down quickly but secretly hoping for a miracle,
Malk.
Straight to the question would be. is it possible to apply for a mortgage on my parent's house with them?
As background, they own their property outright (approx. value £700k) and are both semi retired and hence don't have a large income. I make £42k pa (very stable job) and am debt free with a good credit history and currently rent in the extortionate London market with my partner paying £310 per week for our one bed flat. My partner currently works self employed as a locum dentist and has about 18 months accounts at around £80k pa. She's looking to move to London to a permanent post which would likely be around £60-70k pa.
The obvious solution for buying a house is to save for the deposit which we've just started to do. Realistically we're looking at a couple of years to get to £25k for a 10% deposit plus another £5k for fees, more if we don't have to dip in for emergencies. If this is what we have to do, fine, I'll be back in a couple of years asking for more advice!
On the other hand, I'd rather not be paying the rent I do. If the interest on a £250k mortgage is £833.33 per month then we're paying £500 more than that in rent in a rental market rising above inflation. My parents have very kindly agreed to help me in pretty much any way they can and the most likely solution is getting a remortgage to help with a deposit. As they currently don't have a great amount of income they wouldn't be able on their own to get a particularly large mortgage. Given I'll be paying for it all anyway I'd rather they could get sufficient to enable me to get a higher deposit and access to better rates. In an ideal world they'd be able to mortgage their own property, still at a low LTV for me to be able to buy mine outright. If we could apply to remortgage their property with my income on the application it would make sense to be able to get a larger mortgage, hence the question.
The idea sounds a bit too good to be true though hence my asking advice on whether it is at all possible here.
Many thanks for any advice you can give,
Yours in expectation of being shot down quickly but secretly hoping for a miracle,
Malk.
0
Comments
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Son, I am disappoint.Thrugelmir wrote: »Your set to earn in the region of £250k pre tax in that time.poppy100 -
You would be able to get a joint mortgage with your parents based on your income.
The lender would require you to on the deeds of your parent's house i.e. you would be joint owner.
If you defaulted (redundancy or whatever) they would stand to lose their house.
Given the joint income I would suggest that you leave your parents out of the equation and save for a deposit.
I trust my spelling is better that your ability to save.0 -
Hmm. These things always get really complicated and there is nowhere near enough information in your post to give any opinion really. For instance, you don't say how old your parents are. It would be pointless you getting a £250k mortgage with a limited term of only a couple of years (because of age) The repayments per month would be eye watering !
There are other ways that could be explored though. Would your parents qualify for a Buy to Let mortgage and rent to you ? Obviously a non starter if they haven't a deposit.
Contrary to popular belief it is still possible to get a 100% mortgage so perhaps that might be a possibility ? Anything over the 75% threshold has to be secured on a parents property so it certainly is a case of legal advise all round, but again, it seems to fit what you are looking for.
Always best to save your own deposit though.0 -
Leon makes some good points.
Ultimately, sit down with a decent broker (not an Estate Agent one) and I guarantee you will get a practical solution that is more cost effective than renting...
Good luckI am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it.This signature is here as I follow MSE's Mortgage Adviser code of conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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