Mortgage options

cadenza82

Will try and keep this short...!

Currently live with parents who own the house mortgage-free, value approx £180K We'd like to be able to move over the next few years, and potentially we'd like to find another £50K to put in with that.

They're both approaching 70 so wouldn't get a mortgage now (even though they could afford it). I'm self-employed on a reasonably low income, but could potentially raise the £50K as a mortgage.

Does anyone know of any clever way we could make this work? I don't know whether it would be possible in some way to have a share in the property, somehow taking a mortgage out on that share? It's our circumstances which are the problem as none of them really fit in with mortgage lending, but I'm sure there might be a roundabout way around it!

kingstreet

You can't have parties to the ownership not named on the mortgage and you can't mortgage a part of a property.

cadenza82

kingstreet wrote: »

You can't have parties to the ownership not named on the mortgage and you can't mortgage a part of a property.

So on that basis, there'd be no way round it at all?

kingstreet

Only to exclude your parents from ownership, but that robs them of any security if you are ever insolvent and creates the possibility of a deprivation of assets claim if either of them ever needed council-funded care.

Dave_Ham

Not necessarily, you will just need to find a lender that will lend to all 3 of you on a residential basis so you are on the deeds and mortgage as all 3.

They are out there.

What Kingstreet was saying is that you cannot just get the mortgage in your sole name, but all 3 split on the deeds.

kingstreet

I jumped ahead and saw the short-term to a likely expiry age making the monthly cost prohibitively expensive.

If your parents have sufficient income, they could consider a lifetime mortgage, which you could then pay back.

JimmyTheWig

Could they not get a mortgage in all three names but affordability based on the OP's income alone?

E.g. my wife and I have a joint mortgage. We use my salary for the affordability and ignore her very small self-employed earnings. I don't see why that should be affected if my wife was to retire?

Dave_Ham

It can be - although would limit OP to a handful of lenders that operate such a scheme.

kingstreet

JimmyTheWig wrote: »

Could they not get a mortgage in all three names but affordability based on the OP's income alone?

E.g. my wife and I have a joint mortgage. We use my salary for the affordability and ignore her very small self-employed earnings. I don't see why that should be affected if my wife was to retire?

A lender may lend to all three, but if it sets its maximum expiry age at, say, 75, the mortgage term is going to make the payments prohibitively expensive.

cadenza82

Thanks for your suggestions.

When we moved a few years ago we had a lot of trouble because all the lenders we looked at for a two or three-way mortgage took Mum's age/income first (she's older) so they wouldn't consider it. In the end, we had to do it in Dad's name only, so in fact the mortgage and deeds were/are all in his name. The mortgage was to be paid off by his 75th birthday, but actually we used his retirement lump sum to pay the lot off.

I haven't come across lifetime mortgages; I wonder how that might work?

kingstreet

Lifetime mortgages include products like equity release, so they require advice and the intermediary giving the advice has to have extended permissions to do so.

Your best bet would be a consultation with an Independent Financial Adviser, or broker with those extended permissions.