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

ethank

3d3 wrote: »

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.

As mentioned by 3d3 -Please see the article at http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/9655296/Is-equity-release-the-answer-to-your-interest-only-mortgage.html

ethank

I feel sorry for you. From an outsider view, Your parents are putting you in a very difficult position to keep the house that they are about to lose due to making bad investments in their own business. It is difficult for any child not to feel responsible for looking after their parents - but this mortgage is a commitment that will change your life.

You mentioned that I think you need to take a step back and really think about this. Are you helping out your parents to stay in their home, or are you actually going to be the owner? Who will make all of the important decisions going forward? There are some stories on here where family relations have broken down as a result of differing expectations on both sides in situations like this.

You know your parents better than anyone else, but do give some thought to what you might be getting yourself into.

amnblog

haras_nosirrah wrote: »

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

This is not true for all lenders.

The main issue here from the mortgage point of view is the affordability.

Any means tested benefits your parents enjoy will also have to be considered.

Engage a good broker.

ACG

I wouldnt say there is a definite answer but I suspect there will be a couple of lenders who would look at this. Potentially high street lenders.

As above, find a broker.

haras_nosirrah

amnblog wrote: »

This is not true for all lenders.

The main issue here from the mortgage point of view is the affordability.

Any means tested benefits your parents enjoy will also have to be considered.

Engage a good broker.

I thought sale and rent back schemes (I.e where property was sold on and original owner remained) were no longer doable due to legislation

Yorkie1

ethank wrote: »

You mentioned that I think you need to take a step back and really think about this. Are you helping out your parents to stay in their home, or are you actually going to be the owner? Who will make all of the important decisions going forward? There are some stories on here where family relations have broken down as a result of differing expectations on both sides in situations like this.

You know your parents better than anyone else, but do give some thought to what you might be getting yourself into.

Ethank raises a very valid point. You will be taking on the legal ownership for the property, but in all likelihood your parents will continue to treat it as their own insofar as making decisions about it. You will be liable for its maintenance, insurance, etc because they will no longer have a legal interest in it.

You also don't say how old you are, but if you ever wanted to buy a place on your own (or met someone else and wanted to buy a place together) then this mortgage will have to be taken into account when assessing your affordability - and may well make the difference between a lender being willing to give you a mortgage for a further property.

That is a very big sacrifice for your parents to ask of you; one which will tie you to the property until they die and/or both move out because of needing residential care (to be blunt).

dktreesea

If you are an adult and live with your parents why can't you pay them board, - after all you would have to pay your own rent if you move out, - and then your parents can use that top top up, or pay in full, the mortgage?

That keeps you flexible, and gives them some funds to pay the mortgage with. So they could still pay the mortgage from their account, as per usual, but due to receiving board from you, could use that board for their day to day living expenses.

I don't think when it comes to children living at home , their board becomes the parent's income. I could be wrong but just in case, make sure that the amount you are paying them won't affect their pensions, and if it would, then just pay some of their other bills directly for them, e.g. the electricity bill.

Gaz83

dktreesea wrote: »

If you are an adult and live with your parents why can't you pay them board, - after all you would have to pay your own rent if you move out, - and then your parents can use that top top up, or pay in full, the mortgage?

That keeps you flexible, and gives them some funds to pay the mortgage with. So they could still pay the mortgage from their account, as per usual, but due to receiving board from you, could use that board for their day to day living expenses.

I don't think when it comes to children living at home , their board becomes the parent's income. I could be wrong but just in case, make sure that the amount you are paying them won't affect their pensions, and if it would, then just pay some of their other bills directly for them, e.g. the electricity bill.

The mortgage has expired, and there is a shortfall of £51,000. It's not as simple as continuing to pay the monthly payments. OP has said that they cannot extend the term any longer.

dktreesea

Gaz83 wrote: »

The mortgage has expired, and there is a shortfall of £51,000. It's not as simple as continuing to pay the monthly payments. OP has said that they cannot extend the term any longer.

Thanks for the explanation. I missed to OP's opening post - the part where he said the mortgage was now at the end of its term.

dktreesea

OP, what about an equity release, but to you as opposed to a third party? Do you have any savings to put towards buying a part share in the property?

Say you buy one third of the property for £55k or thereabouts. You then get a mortgage for £50k, definitely do-able on your salary, and pay your parents the deposit plus the £50k once it comes through. They then pay off their mortgage with the bank. This should at least give them a bit of room to breathe financially.

You then continue to live on with them as at present, but now you all own the house, not just them. Their share of the house would be the equity they have built up over time, so they would then be mortgage free. And you would then be paying off your mortgage for the part of the property you now own.

If you both bank with the same bank, they should be able to facilitate this arrangement. Transfer of part ownership in the house to children due to a mortgage shortfall, usually because the endowment isn't enough to pay it off at the end of the term is not such an unusual arrangement.