Bit of a complicated situation with brother and mother

AFK_Matrix

Hi,

So I just posted this in the housing section:

So my mum currently owns a house and my brother also lives there, but in 4 years time the mortgage will end and there is still around 115k outstanding as it is an interest only mortgage and my mum is 63 so getting a new mortgage is going to be near impossible I think (have been told a mortgage will only take into account her pension even though she is working), but we are researching this.

So they are going to have to move and there hopefully will be 235k equity once the house is sold. So I can see 4 options for them:

1. My mother gets a house that is under 235k and thus no mortgage.
2. My mother gets a small mortgage max 50k so that she has some spending money left over from the sold house equity.
3. My brother gets the small mortgage instead and my mother is a lodger.
4. They get a joint mortgage together for 50k.

Now I am just wondering if there are any issues with these options in regards to taxes or extra costs etc? I am going to post up in the mortgage board to get some more help with getting mortgages for my mum or brother etc.

So my question is more towards are there any problems issues with the mortgage options I have stated there?

My mothers pension is around £980 a month and as I said she has been told that a mortgage can only be done on her pension, is this the case even though she is working?

My brother currently earns £17k per annum and has a take home pay of £1200 per month. He has a credit card and a mobile contract and never had a late payement etc and he is 23 years old. I am just wondering if he would get a mortgage for 50k on a 250k house (this is the max amount mum wants to buy a new house for)?

Sorry for the long post, and thanks for the advice.

Foxy-Stoat_3

Number 1 would be better for your Mother, end of.

Not sure how many mortgages are available for past retirement age so maybe number 2 is out.

If she is thinking about 3 or 4 then get her to speak to a solicitor about the possibility of losing her house and money should the worst happen.

I don't think the lenders will be happy for your Brother to have been "gifted" nearly £200,000 cash then have the "gifter" PAYING to live there. Doesn't sound right.

Get her to buy a house outright, no mortgage, your Brother pays her as a lodger so she won't need to use house equity as "spending money".

Wh05apk

It May be possible for your brother and mother to get a mortgage in joint names, although the lender would not use your mothers income due to her age, as it stands based on his income, they would probably lend about 75-80k, although given that you have 4 years to sort this, his income could increase sufficiently to get the full £115k?

AFK_Matrix

Wh05apk wrote: »

It May be possible for your brother and mother to get a mortgage in joint names, although the lender would not use your mothers income due to her age, as it stands based on his income, they would probably lend about 75-80k, although given that you have 4 years to sort this, his income could increase sufficiently to get the full £115k?

Thanks for the info, I forgot to mention that mum would like to move next year so his salary wouldn't increase a huge amount. Nice to know that he could get that amount but 50k is the maximum.

Jenniefour

One other thought. Your brother is young. Is he wanting to tie himself into a situation where he has a mortgage on a property shared in some way with your mother? In future years this may prove to be a big limitation for him and will affect his ability to get another mortgage when he leaves home. It would be wise for the solution to keep him free of mortgage commitments that involve your mother.