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Taking over parents house
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Class2ldn_2
Posts: 5 Forumite
Hi all bit of a long winded post this but here goes lol.
Basically my mum and dad own a house which is valued at around 300k upwards (wimbledon sw london) . They have 10k left on the mortgage and my dad is self employed.
Now hes got himself into some bother with the tax man and owes around 25k which he cant afford to pay in one hit and they are not accepting a monthly payment (not sure why) but they are threatening to take the house off them which seems daft for a 25k debt on a house valued at 300k plus.
Im an only child and still trying to get on the property ladder but have very little saved up so will be at least another 2-3 years before we can afford even a 10% deposit.
Its been suggested that if i was to take over the house by getting a loan /mortgage whatever it is and paying off the current mortgage i could then approach a lender to get a mortgage for our own home as id use their house as security (their idea). Now obviously its a risk but my parents are willing to do it as a) it gets them the money to pay off the tax and their mortgage and b) i can get a deposit for a house.
We went to lloyds yesterday to see a financial advisor and he said lloyds would give me a mortgage for our own home but not the initial loan to pay off the tax as they dont allow family to remain in the property if a son or daughter takes it over, apparently there are a few who do this aswell.
Now the advisor said that even if i took say just a 35k loan to pay off the parents mortgage and tax that id still need a deposit for our own mortgage and having the security of my parents house would make no difference as it would still be a 100% mortgage so he said if i was to get initially a loan/mortgage whatever it is for say a 100k after giving my parents the 35k id have 65k as a deposit to approach a lender. Now this is when the guy said that i could go back to lloyds and subject to the usual checks i could then get a mortgage for the rest.
We rent in sussex and a 3 bed house would cost say 250k
If we have 65k as a deposit we would only need a deposit of 185k but obviously this means id be paying two seperate arrangements, 1 for the initial 100k and one for our own mortgage.
My dad would be paying me the 35k in monthly installments so that would be ok because he can afford it but i can afford to do it if he cant some months.
It worked out that both payments come to a total of around 11-1200 a month which is reasonable for a mortgage i think but my concern is that initial 100k,i dont want 2 loans/mortgages for 30 years but my dad said it wont be 2 because the 1st would be paid back out the equity from their house as its way above the loan amount
This is where i get lost.
Anyone have any experience of this?
Obviously the house goes to me when they die so its in my interests aswell to help them out.
Any advice would be welcome
cheers
Basically my mum and dad own a house which is valued at around 300k upwards (wimbledon sw london) . They have 10k left on the mortgage and my dad is self employed.
Now hes got himself into some bother with the tax man and owes around 25k which he cant afford to pay in one hit and they are not accepting a monthly payment (not sure why) but they are threatening to take the house off them which seems daft for a 25k debt on a house valued at 300k plus.
Im an only child and still trying to get on the property ladder but have very little saved up so will be at least another 2-3 years before we can afford even a 10% deposit.
Its been suggested that if i was to take over the house by getting a loan /mortgage whatever it is and paying off the current mortgage i could then approach a lender to get a mortgage for our own home as id use their house as security (their idea). Now obviously its a risk but my parents are willing to do it as a) it gets them the money to pay off the tax and their mortgage and b) i can get a deposit for a house.
We went to lloyds yesterday to see a financial advisor and he said lloyds would give me a mortgage for our own home but not the initial loan to pay off the tax as they dont allow family to remain in the property if a son or daughter takes it over, apparently there are a few who do this aswell.
Now the advisor said that even if i took say just a 35k loan to pay off the parents mortgage and tax that id still need a deposit for our own mortgage and having the security of my parents house would make no difference as it would still be a 100% mortgage so he said if i was to get initially a loan/mortgage whatever it is for say a 100k after giving my parents the 35k id have 65k as a deposit to approach a lender. Now this is when the guy said that i could go back to lloyds and subject to the usual checks i could then get a mortgage for the rest.
We rent in sussex and a 3 bed house would cost say 250k
If we have 65k as a deposit we would only need a deposit of 185k but obviously this means id be paying two seperate arrangements, 1 for the initial 100k and one for our own mortgage.
My dad would be paying me the 35k in monthly installments so that would be ok because he can afford it but i can afford to do it if he cant some months.
It worked out that both payments come to a total of around 11-1200 a month which is reasonable for a mortgage i think but my concern is that initial 100k,i dont want 2 loans/mortgages for 30 years but my dad said it wont be 2 because the 1st would be paid back out the equity from their house as its way above the loan amount
This is where i get lost.
Anyone have any experience of this?
Obviously the house goes to me when they die so its in my interests aswell to help them out.
Any advice would be welcome
cheers
0
Comments
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This all sounds pretty convoluted. I'd suggest your Dad sorts out a loan to keep the taxman happy and then you deal with your need for a home when that's all straight. Always keep the tax people happy as a first resort, they have far too many powers for their own good (or yours), then sort the rest. Good luck and don't do anything without taking good independent advice (ie not someone who's trying to sell you something).Hope is not a strategy.0
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Well unfortunately he did try to remortgage but the bank wouldnt let him because of his credit. Thats obviously the easier way as hes quite happy making payments on a monthly basis, he pays 450 a month for his mortgage now, the funny thing the tax are now giving him 450 quid tax benefits that he was owed but never knew about lol.0
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but they are threatening to take the house off them which seems daft for a 25k debt on a house valued at 300k plus.
The HMRC requires payment of the tax, which the longer it remains unpaid will grow with interest. If your parents do not have the money to settle the tax bill then selling assets is the way forward. Whether this voluntary or forced makes little difference.0 -
Why not just lend your parents the money? Then seek repayment on a monthly basis.0
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Yeah which is basically what id be doing but id need a loan and a secured one at that so the only way to get that is if i own the house0
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