Buying house as tenants in common with parents - how best to mortgage our %?

LKM1985

Hi all,

My husband and I (plus two children) are selling our house and purchasing a house with my parents (also selling their house) - so we can all be together... babysitting for us in first instance, and looking after them as they get older as the later intention.

My parents have no mortgage and will be purchasing their share of the property (75%) with cash. We still have a mortgage, both work, and would want to purchase our share - 25% with part cash / part mortgage.

Does anyone know how mortgage companies view this arrangement? The property only has one title, so we aren't purchasing any element of the house, just our agreed percentage? I feel like it should be simple-ish, effectively we would be borrowing 20% of the total house value at most, and therefore it is a very secure loan for any mortgage company, but as four people are named as owning the property I don't quite know if it ends up like that!

Any insight greatly received. TIA

betmunch

You would all need to go on the mortgage if you own it like that.
you cant have a mortgage on 25% of a house, but you can have a mortgage on 100% of the house then specify each owners share of the house as you described.

Rollinghills

I think there is no issue with purchasing it as tenants in common. Your parents will each buy 37.5% and you and your husband will buy 12.5% each.

The problem is that normally the people who are named as buyers must be on the mortgage. This is something you need to seek further advice about, there may be some lenders who are happy with it and some who are not. I think a mortgage broker will be a good place to start.

I heard with HSBC you may be able to avoid your parents being on the mortgage but I don't know for sure. HSBC mortgages used not to be available via brokers but I read that now they do via Countrywide.

LKM1985

Thanks both - do either of you know... if all of us have to go on the mortgage, are we restricted in number of years by my parents ages? They're both 60... we are 30 and would borrow over 27 years - obviously they don't have that length?

Or somehow as we are the ones primarily on the mortgage, can we still borrow over our lifetime?

Thanks!

Senior_Paper_Monitor

This is a hugely complex scenario and there are only a small handful of lenders who will consider getting involved - and most not in the structure you are describing ... get professional advice not a trawl around the forums or your local saloon bar experts.

Rollinghills

I'm sorry, I don't know. If I were you I would speak to HSBC to see what they think and also find a good mortgage advisor to get their opinion and access to more lenders who might be willing to accommodate unusual arrangements.

betmunch

The mortgage company would take the oldest applicants age into account when determining maximum term.

I think SPM is right, get to a decent broker, what you want to do can be done by a few lenders, but not the way you describe.

LKM1985

Thanks - we obviously will go through a broker, I was just attempting to glean an insight before speaking to a couple. Have put in a call to London and Country, so will see what they come back with.

amnblog

The complication of the ages of your parents need managing as does getting four of you on the application.

You need a good broker for sure.