Mortgage After Home Paid Off

whambam

Hi,

What is the rules regarding getting a mortgage for a home that is already paid off by your parents in order to live in that house under your own name? The mortgage would be required for to pay off the remaining people whom lived in that house.

Thanks.

Yorkie1

In order to get a mortgage you will need to be on the deeds. Most lenders require the same people to be on the mortgage and the deeds. Therefore, effectively, you would be buying all or part of the property - i.e. either a complete transfer of ownership, or you'd become a joint owner with your parents.

Is the house currently owned by your parents?
Will your parents remain in the house after you buy it / get the mortgage?
If not, what are their plans?
How old are your parents and do they have an independent income?
Are they likely to need to claim housing benefit or claim means-tested care in the foreseeable future?

These questions should help people provide an opinion on whether your suggestion is feasible.

whambam

It's currently transferring to my mother as executor status after my fathers passing. Yes, my mother wants to live with me wife and children. Mother is over 55. She gets carers allowance.

Yorkie1

Sorry to hear about your father.

Did your father own the property in his own name alone, or was your mum on the deeds as well?

What does the will say about the property?

Fruit_and_Nut_Case

Is there any chance that HMRC might try to say that this is a manoeuvre to get around paying Inheritance Tax? Not saying they would; just wondering how their minds work.

Yorkie1

Fruit_and_Nut_Case wrote: »

Is there any chance that HMRC might try to say that this is a manoeuvre to get around paying Inheritance Tax? Not saying they would; just wondering how their minds work.

On what basis do you think it might be?

whambam

It was jointed owned the mortgage letters come in both names. Isn't inheritance tax due on large amounts of savings/investments or property?

getmore4less

you need to give more details on the will and values

if no mortgage and it is inherited by spouse then no need for a mortgage and IHT exemptions apply.

it is quite unusual to transfer to executors that is not normally needed.

macman

whambam wrote: »

It was jointed owned the mortgage letters come in both names. Isn't inheritance tax due on large amounts of savings/investments or property?

IHT threshold is £325K. Impossible to advise without knowing the house value.