Can my mother get a mortgage to help us?

EmmaL

Hi - wondered if any of your wise folk can answer a question for me. Here's the situation...My mum very generously wants to help my brother by giving him some capital towards buying his own places. He and I have owned a place together for the last three years (I invested the windfall I made on my previous property with him to help him get on the property ladder) but are planning to sell up and go our separate ways. We've made a bit on our property, but split between us that doesn't leave my brother with a great deal of capital to invest in his next property.

A friend of mine has suggested that our mum could take out an interest only mortgage against her property, which she owns outright and is worth £500-£600k. She would then have capital to give my brother but as we dont' want her to suddenly have payments to make having been mortgage free for 15 years, he could cover the payments on the mortgage for her (having taken into consideration that this amount will be on top of any mortgage he takes out himself). My mum works full-time now, but she is 64 and may have to retire from her job next year (though I think if her workplace will let her she'll probably stay on). If she does retires she will have a fairly healthy pension income (not sure how much) but as a person close to pensionable age, can she get a mortgage at all, and if so what would be the maximum term - 10 years, 20 years?

We've read up about equity release, but as my mum is fairly young, fit and healthy I don't this is a good option - the amount owed could be triple the orginal amount borrowed by the time she sells her property or pops her clogs...

Thanks
xEmma

Mr_helpful

She could do this but mortgages in retirements are not always a good idea. I think your brother should discuss with a broker his options

Fallen_Angel_6

Could your brother not get a 100% mortgage?

EmmaL

Yes - I think you guys might be right. If my bro can get a mortgagefor x5 his salary he should be OK. My mum wants to help but I'm not sure it's the best financial decision for her. She would like to give us some cash now though to avoid inheritance tax later etc...

JoeK_3

She could consider a Lifetime mortgage.

Google lifetime mortgages to find further information.

JoeK