Family mortgage....

gt568

Dudes

Help a mortgage noob out please...

Basically my wife and I would like to buy half of my parents property and then we would all live in in together as tenants in common, the 4 of us owning 25% each.

We have no debt and enough of a deposit, assuming we meet standard lending criteria, are there many lenders who will go with this style of arrangement?

kingstreet

No. You'll find one lender willing to lend to fewer borrowers than there are owners and I can't say if another aspect of its criteria will torpedo your plan.

You will need to research this carefully before embarking on any expenditure...

...and no, brokers don't name lenders on here.

gt568

Sorry, what exactly do I need to research? Which lenders will lend in those circumstances?

kingstreet

Yes. Exactly.

You need to hit the phone.

gt568

kingstreet wrote: »

Yes. Exactly.

You need to hit the phone.

I see, I'd planned to go to a broker, isn't that what they do?

Also did I interpret what you wrote correctly in that out of all the mortgage lenders in the UK only 1 will lend in those circumstances?:o

kingstreet

Only one that I am aware of.

Being able to borrow on a property which is owned by more people is a very rare facility. No-one (me included) believed it was possible until I called a solicitor I know and he told me he had done one.

It isn't a lender which deals with brokers, so I suspect the answer from most brokers will be that it can't be done.

gt568

!!!!. I see.....

Is there any way we can work around this situation and get a mortgage? I thought it was relatively common for people to club together to buy a property....(I realise that isn't quite the case here)

kingstreet

You will find some lenders will accept upto four borrowers as long as there are the same four owners, and vice versa.

It is this;-

Basically my wife and I would like to buy half of my parents property and then we would all live in in together as tenants in common, the 4 of us owning 25% each

which is problematic if your parents aren't going to be party to the mortgage.

gt568

So would we have the same issue if we went to a completely new property with them purchasing their share with cash and us on a mortgage?

kingstreet

Yes. Exactly the same.

If they are to retain a share of the ownership, you will need to include them in the mortgage for all lenders but one.

Other option may be them gifting their equity to you, but that would leave them with no interest in the property; open to a suggestion of deprivation of assets if council funded care is needed and another issue for many lenders as they would live in the property they claim they have no interest in.

This is not straightforward and requires careful planning.

gt568

Thanks for taking the time to answer.

If we were to include them as named on the mortgage then, would that be do-able?

We looked at the gifting option but discounted that.