Buying my grandparents house....?

CocoDeNata

Hi,

I'd love some advice, my partner and I may have the opportunity to buy my grandparents house, as they would like to move into a bungalow where they can move around more easily etc. How would this be done? We don't have a lot for a deposit, probably 6/7% at most, I have heard there is a way to remortgage the house so they can buy another property and all four of us could be put in the paper work? I am also aware that currently the house would have been going to my mother and uncle once inheritance kicks in, if we bought it would we be responsible for any payments further down the line? Through taxes or the like? I literally have no clue, I'm going to chat to them more about it tomorrow because it would be an awesome chance to get on the ladder. I want to make sure I have all the answers firs though


Thanks all!:o

TBagpuss

If you buy the house, then it is no longer your grandparent's property so you would not be liable totheir estate in relation to any inheritance.

If you cannot get a mortgage to allow you to buy the property outright then it *might* be possible to have a situation where you grandparents effectively agree to lend you part of the value, in which case you would need to agree on the terms on which you would pay back the extra.

It is in some circumstances possible to have a situation where you and your grandparents owned part each of the property (i.e. you bought a share from them) but this gets more complicated - you would struggle to get a mortgage for part of the property, and if you and your grandparents got a joint mortgage then this has disadvantages for them, and also as most lenders won't lend where the mortgage term will end after the borrower is 65 (or sometimes 70), you might find you could borrow much less as the mortgage term would be much shorter.

Have you looked into how much you can borrow? 6-7% is quite low as a deposit but some help to buy mortgages have 5% deposits, so a lot would depend on the value of the house and how much you can borrow.

If your grandparents sold to you at an undervalue, or if they were going to lend you part o the price so it became affordable, then both you and they would need to take separate advice to ensure that you were all clear about the legal and tax implications.

CocoDeNata

Thanks Tbagpuss, great info there. We have check on our current salaries and would be able to get around 130k, but with a small deposit this makes our monthly payments shockingly high! Over £700 in some cases, but then again maybe its worth it to have our own property. Better than renting at £550-£600 a month for the same type of property, and we gain nothing, I guess.

They are getting the house valued next week I think, I have checked on mouseprice and zoopla for last selling prices on the same street and they came out 124k & 133k, last year. I believe there may have been a small increase in value since then, maybe a grand or so on that street.

I think it may be manageable, I just don't wanna, A: rip my grandparents off, and B: Get in way over my head!!

Cheers, Coco