Can I purchase parents house with mortgage at below market price

Michelle83

My mum and dad have a property that is mortgaged, there is around £65,000 remaining on the mortgage. The house is probably worth around £135,000 based on the price that identical houses in the street have sold for. They also have around £40,000 in loans that are secured against the house. They have struggled to pay the payments for a while and recently it got a lot harder so they are looking to get rid of the debt, unfortunately they are unwilling to leave the house and go into rented accommodation.

My parents need the house to sell for £110,000, I have £13,000 in cash that I could afford to spend on this and my grand father has offered to gift me £20,000. Would I be able to get a buy to let mortgage based on a sale price of £110,000 (even if the house is worth more) with a £30,000 deposit and then rent it back to them for the mortgage costs? I don't have any debts but don't own my own house yet. My salary is £45,000 per year.

Thank you.

koexelek

You can sell a property to children at undervalue, but

... parents need to move out
... you need to move in

I think you'll struggle to do it the way you want to.
Virtually no lenders currently offer buy to let mortgages to first time buyers these days either

kingstreet

koexelek wrote: »

You can sell a property to children at undervalue, but

... parents need to move out
... you need to move in

I think you'll struggle to do it the way you want to.
Virtually no lenders currently offer buy to let mortgages to first time buyers these days either...

... especially not regulated buy to lets, where the property is to be occupied by a relative.

StuC75

Looks a none starter in oh so many ways..

Mortgage \ Buy To Let \ Parents Remaining in the house after, along with you not really wanting to buy a house..

Best \ Likely scenario likely to be you & Grandfather gifting them £33k to pay off chunk of debts, ensure life insurance is paid upto date and they then leave the property to You \ Grandfather in there will.. as that would likely be the only time that you would get the house...

Sometimes the Simplest option is the most straightforward...

Michelle83

StuC75 wrote: »

Looks a none starter in oh so many ways..

Mortgage \ Buy To Let \ Parents Remaining in the house after, along with you not really wanting to buy a house..

kingstreet wrote: »

... especially not regulated buy to lets, where the property is to be occupied by a relative.

Just to confirm I'm understanding correctly: it's impossible to get a buy to let mortgage if the previous occupier remains in the property? or if a family member lives in the property? Even if they pay rent? I asked a mortgage broker about this a few weeks ago before I knew my grand father would be able to help and he said I could do this if I got the money for the deposit.

The only way that I could do this is if I was a cash buyer?

StuC75 wrote: »

Best \ Likely scenario likely to be you & Grandfather gifting them £33k to pay off chunk of debts, ensure life insurance is paid upto date and they then leave the property to You \ Grandfather in there will.. as that would likely be the only time that you would get the house...

Sometimes the Simplest option is the most straightforward...

Unfortunately this is not an option, on top of the debt problems their marriage has fallen apart and they are unofficially separated and are looking to divorce, which means even if we paid off their debts they would still be tied together by the mortgage and neither has enough income to re-mortgage as an individual.

Thank you

dawyldthing

Your best bet would be buying it and you moving in as they can live with you but wouldn't be able to live in it without you being there as the mortgage is there for you and it would also make problems for insurance and the like

globetraveller

If they are separating I can' t see your possible solution as a long term one anyway.
Could they perhaps take in a lodger short term to help pay their mortgage?
Also a possibility- let the house out for a year or two and move into cheaper rented accommodation? ( if there is such a thing).
Obviously we don't know how they got to the point where they have 40k of debt,, but that coupled with the fact that they don't want to move anyway( and therefore are maybe in denial of their monetary situation??), should make you think about the possible difficulties you would have getting the rent from them. Might be wise to take a step back and let them sort it out themselves.

witchy1066

this doesn't make sense ,
you say they are unwilling to move out, then you say they are going to divorce,
were they both intending to stay in the house after divorce, it that is the case then why can you and your grandfather not help them out ,

the best option and most sensible option would be to sell the house on the open market for its value, split the equity after all debts are paid and both move on,

Michelle83

witchy1066 wrote: »

this doesn't make sense ,
you say they are unwilling to move out, then you say they are going to divorce,
were they both intending to stay in the house after divorce, it that is the case then why can you and your grandfather not help them out ,

the best option and most sensible option would be to sell the house on the open market for its value, split the equity after all debts are paid and both move on,

Sorry I'm tired and didn't explain very well.

My dad has some mental health issues and will not leave the house, it is the only thing that he has left in his life and he says that he will only leave when he dies. My mum is okay with selling the house and is okay to rent her own place, but she cannot without my dad agreeing to sell. She can't afford to force the house to be sold because any solicitor costs would make it so the debt could not be paid. There's nothing we can do to make him leave, but without the debt paid my mum can't leave and she's getting very depressed because of it.

globetraveller wrote: »

Might be wise to take a step back and let them sort it out themselves.

I explained a bit more to witchy. I would like to just let them solve the problem themselves but I was asked to help and at the moment I am paying some of their bills and I also have siblings that are under the age of 18 living with them and they need to have food and clothes and stuff so I can't just abandon them unfortunately.

The situation is a big mess

jacques_chirac

What will you do if they stop paying the rent?

Michelle83

jacques_chirac wrote: »

What will you do if they stop paying the rent?

I live very frugally and could afford to pay the mortgage alongside my own expenses, I currently save over half of my income, the only concern with regards to money is that my cash is invested in my small business that I am running with a friend and I would have to sacrifice my business to buy this house with cash and that is not an option for me.