Transferring a mortgage to a relative

pinksamb86

Hello

Is it possible to transfer a mortgage to a relative and also for them to own the house?

Basically my parents can no longer afford the mortgage on their house and have asked if its possible for my husband and i to take it over. We are currently renting so it would be a good opportunity to own our first home, especially as they only have 15 years left on the mortgage and we wouldnt need a deposit.

Does anyone know if this is possible or have had any experience in doing this?

Any advice would be much appreciated.

GMS

You would need to buy the property from your parents.

You need a lender who will accept a purchase at undervalue with the equity being gifted as the deposit.

Where will your parents live after you buy?

pinksamb86

i am unsure how the equity will be used as a deposit? sorry i m completely new to mortgages!

with regards to where they will live, thats not been decided yet, we are just looking at options.

GMS

Lets say for example the property is worth 100k. You are paying 75k for it. The 25k equity would be your deposit, assuming the lender allows the 100k to be the purchase price.

Crucial as to where your parents will live afterwards so needs to be decided.

Are they planning to remain in the property?

holly_hobby

If your parents intend to reside post completion, they will need to be party to the mortgage.

If they, or you, don't want this, due to they remaining responisible for the mge or a restricted mortgage term (due to the ages), then this is a no goer - this is because there won't be vacant possession on completion which effects the lenders possessionary rights (if they should need to seek a order for possession).

Hope this helps

Holly

Building_Surveyor

Presumably they are not that old if they have 15yrs left to run on the mortgage. Can't they downsize?

Mojisola

GMS wrote: »

Lets say for example the property is worth 100k. You are paying 75k for it. The 25k equity would be your deposit, assuming the lender allows the 100k to be the purchase price.

pinksamb86 wrote: »

with regards to where they will live, thats not been decided yet, we are just looking at options.

If your parents give you the 25k equity (or whatever the figure would be for their house), they won't be able to claim benefit help with rent for some years in the future because they will have given away capital that they could have used to live off.

amnblog

Pink

Some lenders will do this only if your parents move out.

Some will do it if they intend to stay there.

All subject to lenders underwriting of course.

holly_hobby

Its the beneficial ownership legal rights of the parents that are the issue re possession and they remaining resident post completion, not the lenders individual underwriting criteria.

That is also why such arrangements as "sale and rent" set ups are not accepted, and vacant possession is always demanded by the lender on resi mges.

Accordingly the lender will not agree any mge re the OP, if they are aware the vendors are to remain resident post completion (due to the above issues) - of course the Vendors & OP could falsely confirm vacant possession to their solicitors but that would be a matter for they to contemplate and consider the ramifications.

Hope this helps

Holly

amnblog

I appreciate what you are saying about the legal position Holly but I know of two lenders who will do this and let the vendors stay with the new owners.

holly_hobby

Is that professional/personal experience ?

If so, great its the first I've heard of where they're a bit lax, could you advise who the 2 lenders are ?

Thanks
Holly