Can I get a mortgage to buy my parents house and they live with me?

Gooberfreek

Hi, I'm new to this Forum but I am desperate for advice as I keep getting told all sorts by friends and family and I do not know who to believe!

my parents mortgage has come to its term still owing £51,000 and they cannot extend it any longer, they are both of pension age now and both want me to have the house, the house is worth £160,000 but they are happy for me to just pay them what is left on the mortgage!

Now here is the complicated bit, I still live at home with my parents and they want to continue to live with me once I have bought it.

Is this possible? I earn just £17,000 per year...

I only have a week to come up with an answer or they lose the house!!!

Thanx, a very worried member...

kingstreet

This is fraught with issues.

You want a concessionary purchase where the donor will continue to reside in the property.

Your income is tight for that size mortgage, dependent on outgoings/term etc.

Potential deprivation of assets issues if one of them needs state-funded care in the near future.

I'm not sure if any lender will accept the main issue at the top. Lenders base lending decisions on risk and an occupant selling cheap and remaining in the property could give them future legal problems on repossession.

GMS

Could they not sell and use the proceeds to buy something smaller?

PasturesNew

When they took the mortgage out, what was their Plan A when they got to this stage?

pjread

could talk to a broker - i'm just wondering if there is a lender who might consider a three way joint mortgage between you and parents, depending on their incomes/ages

Gooberfreek

Thanx for the reply's, the thing is my parents have only ever lived in this house (31 yrs) so they do not want to sell it, the 3 way mortgage sounds good however my parents both rely on benefits as they are pension age and my mother is a carer for my father.

My father had intended on paying before end of term but he remortgaged several times because his business was failing and now we are in this mess!

Thanx...

Yorkie1

Kingstreet mentions deprivation of assets. If any of the benefits claimed by your parents are means-tested, your parents would be deemed to have received the full value of the house from you, and thus those benefits would stop because of this.

Your parents also lose any security of accommodation by this plan, in that if you have financial difficulties, or die, or get married then divorced, the house is an asset of yours which could be taken away from you.

Gooberfreek

Ok so a Re-mortgage with me added so 3 of us on the re-mortgage is possible? Even with them being pension age (60 & 65)?

I know it's only bricks and motar but this house has been our home for over 40 years...lots has happened, my little sis passed away here in her sleep 5 years ago so my mum doesn't want to leave it ever!!!

Plus it has been adapted for my dads disability, he has a bedroom with a hospital bed and a wet room (bathroom) downstairs.

Thanx from a very worried member...:(

haras_nosirrah

I cannot see that this is going to be possible

Lenders would not allow parents to remain in the property after it was sold

They cannot sell it to you and full market value as you can't afford it

They cannot sell to you at less than market value as it would be deprevation of assets and their means tested benefits would stop

Remortgaging would be tricky as their ages and incomes don't bode well

You could ask existing lender if they would extend the mortgage but it may have to be repayment and the mmr rules may scupper that

Unfortunately when they borrowed the money they promised to pay it back and that time has come. Their best bet may be to sell and buy a ground floor warden assisted place somewhere as even if they do manage to extend the loan they are just delaying the inevitable as no lender will extend indefinitely so they will have the either repay the money or sell. The only other potential option for them is if a family member has the cash to pay off their mortgage and could then maybe register themselves as having a charge repayable on the eventual sale of the property

PasturesNew

Is the garden in any way large enough to sub-divide it and get planning permission and sell that part off to settle the outstanding mortgage?

3d3

Why not try some form of equity release? Then you dont have to be involved at all and they keep the house.

There is an article by the telegraph discussing this called: Is equity release the answer to your interest-only mortgage?
but I can't post links.