Buying My Parents House To Help Them Out

Happylady

I hope I will be able to get some advice on how I can help my parents keep their home.

They are coming up to the end of their interest only mortgage with no savings to pay it off. As I will be inheriting the house it was always the intention that I would buy the house at the outstanding amount if I was in a position to do so. This time has now arrived and I am in a position to buy the house however it has been declined by the lenders because it is too similar a situation to the companies who buy your house and let you live in it until you die.

If I am not able to purchase the house, the reality is my parents will be forced to sell or even have the house repossessed. I don't claim to understand the reasoning behind not allowing me to buy the house, however it seems there's not much I can do about it and I wanted to know what, if any other options are available for us.

My mother works part time and my father is retired on a state pension so their combined income is around £20k. I am told I have the income to make the purchase but have been told the circumstances mean the lenders will not fund it. The purchase price is £120k (the outstanding amount of the interest free mortgage) and it is worth roughly £240k.
I own my own property and have an outstanding mortgage of £95k.

Any help would be welcome.

GMS

How much is your property worth?

The reason you are finding problems is that your parents would be gifting the deposit to you and remaining in the property. This leaves them with an interest in the property causing the lender problems in the event of a repossession.

TrickyDicky101

An option would be to release equity on your existing property to loan to your parents to repay their mortgage.

But this will depend on the extent of equity you have within your current property and your income - neither of which you have currently provided.

Happylady

My income is £45250 and at a guess my house is worth £160k.

castle96

total mortgage required (£120 + £95 = £215) on your property worth £160. Not possible

4.75X your income

Happylady

Thanks for your replies.

Would a buy to let be an option considering the circumstances?

kingstreet

castle96 wrote: »

total mortgage required (£120 + £95 = £215) on your property worth £160. Not possible

4.75X your income

Within the lending maxima of many high street lenders.

kingstreet

Issues;-

- concessionary purchase where vendors will continue to reside

- regulated BTL where family member is vendor and will continue to reside

- second property max LTV and vendor continuing to reside

- second property affordability using only personal income

- ages of applicants if vendors included in mortgage/ownership.

I'm beginning to think we need a sticky on this, as it's growing frustrating saying the same things several times a day (not aimed at OP!).

amnblog

what is a 'sticky'?

Yorkie1

Pinned to the top of the forum list of topics so it 'sticks' there.

Annisele

Have your parents spoken to their lender?

It's possible the lender would be prepared to extend the term of their existing mortgage.