Taking over someone's mortgage

ncjharris

yup, got that far!

Any idea about taking over the mortgage?
Having been through a couple myself, my thoughts were that lenders are generally interested in 2 things - that the value of the house is sufficient for the amount lent and that the lendee has the ability to make the payments.

I would have thought that it would be in their interest to enable the second one to be the status quo, rather than repossess the property and sell and so as long as a new lendee could make the payments they shouldn't mind, but I would like to have some comfort that this kind of thing has been done before.

Ta

kingstreet

To become a party to the mortgage, you'll need to combine this with a transfer of equity to include you in the ownership as well. Ask the lender.

ValHaller

kingstreet wrote: »

If the property was TIC it might.

Tenancy in common would see the deceased share pass into their estate, but the joint and several nature of the mortgage would make the survivor responsible for all the mortgage, despite them not owning all the property.

I can't agree with that. Not fully.

Suppose the property is 50% mortgaged and owned 50/50 by 2 TiC and suppose your interpretation applies and 1 TiC dies, leaving his share to another person and the house is then sold after distribution of the estate, this would leave the inheriting TiC with 50% of the value of the property and the surviving original TiC with nothing. Plainly this would be wrong

Where it might apply is if the property is in say 20% negative equity with an inheriting TiC and a surviving original TiC and the property is then repo'd. The inheriting TiC would get nothing but would not be responsible for any of the shortfall on the basis that you cannot inherit a debt. The shortfall would be entirely the responsibility of the surviving original TiC under J&S liability.

Conrad

It isn't straight forward.

For a start how will they class this purchase? A B2L in which case you can't let your parent remain on deed or usualy officialy reside there.

If it's to be a residential mortgage (a 'regulated mortgage contract') you have to proove this will be your main resi. This then raises questions about what will happen with your current main resi.

If you buy it as a B2L in your name alone, lenders will have questions about the purchase price and and discount given.

There is no such thing as transfering one persons mortgage to someone else. You will be tret as a new applicant, regardless.

By all means ask the current lender, but it's highly unlikely.

ncjharris

Conrad - thanks, that is the kind of answer I was looking for and now you say it makes sense.

I have a permanent residence with a separate mortgage and lender. I wouldn't be intending to make my parents house my permanent residence.

In making it a BtL i know that lenders would be interested in what 'rent' I would be getting.

I will speak to them and see what they say. I am still waiting (2 weeks) for their written confirmation that they have amended the names on the mortgage, so I won't hold my breath for any speedy resolution.