Joint mortgage with parents

Sarah_Seabold

Hi all,

I was going to buy a property with my parents as tenants in common, where each would hold a 50% share of the property. My parents were going to pay their share in cash as a deposit and i was going to get a mortgage for my share.

Initially, I wanted to become joint tenants with my parents but a mortgage broker told me this wasnt possible as in this scenario, we would act as a single owner and therefore my parents would have to be on the mortgage which wasnt possible due to their age.

As tenants in common both hold a separate share and can in theory sell and remortgage etc. that share, i think in theory it should be possible for me to take out a mortgage and them to pay the deposit. However, I also know that in case I defaulted they would be responsible for mortgage payments, I think.
I seem to have exhausted my mortgage broker's knowledge and was wondering if anyone here could help?
Thank you!
Sarah

kingstreet

If you buy a property jointly it doesn't matter if you go joint tenancy or tenants in common, all the owners would have to be party to the mortgage, so what you are trying to do won't work.

How can a lender repossess half a property if the mortgage is only in your name and you default?

I seem to have exhausted my mortgage broker's knowledge

Oh dear. That's not a good sign.

Keekles

In any situation with more than one party on the mortgage, each person is wholly and separately liable for all of the debt.

If we're to assume that your parents are beyond the age of which they can enter a mortgage, they can gift you the deposit, or loan it to you - the latter affecting affordability. In both circumstances this isn't 'ideal' from most lenders perspectives so bear that in mind.

To have the same property under your sole mortgage, you are responsible for the debt yourself; even if your parents gifted you the deposit, this element is irrelevant.


Why are you looking to become tenants in common? Are you looking to still live in the same house but establish yourself on the property ladder?

getmore4less

Sarah_Seabold wrote: »

Hi all,

I was going to buy a property with my parents as tenants in common, where each would hold a 50% share of the property. My parents were going to pay their share in cash as a deposit and i was going to get a mortgage for my share.

Initially, I wanted to become joint tenants with my parents but a mortgage broker told me this wasnt possible as in this scenario, we would act as a single owner and therefore my parents would have to be on the mortgage which wasnt possible due to their age.

As tenants in common both hold a separate share and can in theory sell and remortgage etc. that share, i think in theory it should be possible for me to take out a mortgage and them to pay the deposit. However, I also know that in case I defaulted they would be responsible for mortgage payments, I think.
I seem to have exhausted my mortgage broker's knowledge and was wondering if anyone here could help?
Thank you!
Sarah

Only works for the shared ownership/equity [STRIKE]scams[/STRIKE] schemes

In the normal world you will find it impossible to buy/sell part of a property with a mortgage.

StuC75

Are your parents doing this as an Investment (and so want there stake legally recognising), or is it to help you get on the property market (say with a partner and they want to keep there stake 'noted')....

Either way, as other have said,, if you were to miss payments then the bank would repo the full house and parents would be dependent on getting there stake from remaining equity..

Also if your parents hold a share - how is that covered with any inheritance (what if they left it to another family member who wanted the cash out)..

What if they need care home later in life - would they need to tap into the money within your home?...

Simplest option all round is that they gift the money to you, under a verbal \ family agreement of what the 'unwritten \ unbound' rules are to be..

Sarah_Seabold

Keekles wrote: »

In any situation with more than one party on the mortgage, each person is wholly and separately liable for all of the debt.

If we're to assume that your parents are beyond the age of which they can enter a mortgage, they can gift you the deposit, or loan it to you - the latter affecting affordability. In both circumstances this isn't 'ideal' from most lenders perspectives so bear that in mind.

To have the same property under your sole mortgage, you are responsible for the debt yourself; even if your parents gifted you the deposit, this element is irrelevant.


Why are you looking to become tenants in common? Are you looking to still live in the same house but establish yourself on the property ladder?

yes, I was going to live in the house and my parents were basically going to help me out as the mortgage I could take out wouldn't be enough to buy a flat.. in London. Thanks a lot for your help, much appreciated!

Sarah_Seabold

StuC75 wrote: »

Are your parents doing this as an Investment (and so want there stake legally recognising), or is it to help you get on the property market (say with a partner and they want to keep there stake 'noted')....

Either way, as other have said,, if you were to miss payments then the bank would repo the full house and parents would be dependent on getting there stake from remaining equity..

Also if your parents hold a share - how is that covered with any inheritance (what if they left it to another family member who wanted the cash out)..

What if they need care home later in life - would they need to tap into the money within your home?...

Simplest option all round is that they gift the money to you, under a verbal \ family agreement of what the 'unwritten \ unbound' rules are to be..

I had a feeling that thats how it works.. . I guess I will have to find another way then. Thanks for your help!