Buying Property with Elderly Godparents

shazzy67

Hello All.... first time here so please be gentle with me.

I am currently in the process of looking into purchasing a property with my elderly godparents. They have been stung by one of these equity release schemes :mad: and the only way they can save anything is to purchase a new property (with both of them in their 80s this isn't going to happen on their own).

We think there is around £60000 equity available (plus a little bit for them) and we've found a suitable property for £145,000 (the remainder will be made up for a mortgage I obtain - fingers crossed).

My plan is to have the property made out in my name only so there are no issues with regards to the mortgage etc. I'd put in place a will giving them enduring right to remain so that should cover that issue.

BUT.... I really need to know what are my chances of getting a mortgage with @£13,000 of credit card debt (I'm on a good wage and this will be paid off within 18 months easily).

My overdraft will be nearly cleared this month and therefore it will only be the credit cards holding me back I think.

Can anyone see any major pitfalls?

Thanks for all your advice....:beer:

stephenni1971

So youre going to pay the mortgage for your godparents?

shazzy67

Yes, with them gifting me the £60,000 and I will cover the mortgage.

I can easily afford the additional cost, but they will pay the bills apart from insurances etc.

amnblog

It wont work like that.


Lenders wont want a gift from godparents.


You should put them on the mortgage.

Senior_Paper_Monitor

Double check the cost of buying out of the equity release (many have painful exit penalties - particularly at the moment ) - frankly this is a complex and high risk scenario on many counts.


Take professional advice - and not from a forum.

shazzy67

amnblog wrote: »

It wont work like that.


Lenders wont want a gift from godparents.


You should put them on the mortgage.

Can't understand why not. They are giving me the money.... no strings attached. I have agreed that to assist them I will let them reside in the property with me.

Why on earth would a lender not agree to that?

shazzy67

The equity release "owners" are prudential who have offered a buy out due to potential mis-selling. At present they have @£90,000 equity if they realise a price of £220,000 on their current property. This goes down by @£700 per month due to compound interest.

Mojisola

shazzy67 wrote: »

Can't understand why not. They are giving me the money.... no strings attached.

I have agreed that to assist them I will let them reside in the property with me.

Why on earth would a lender not agree to that?

Because that's a major 'string'!

shazzy67

Why is that a major issue with someone letting me have the money to put as a deposit for a property.

Surely thousands of people do this every year (I know a few)... It's easy saying "it's a string" but why???? I really don't understand

shazzy67

shazzy67 wrote: »

The equity release "owners" are prudential who have offered a buy out due to potential mis-selling. At present they have @£90,000 equity if they realise a price of £220,000 on their current property. This goes down by @£700 per month due to compound interest.

Why is that a major issue with someone letting me have the money to put as a deposit for a property.

Surely thousands of people do this every year (I know a few)... It's easy saying "it's a string" but why???? I really don't understand

Mojisola

shazzy67 wrote: »

Why is that a major issue with someone letting me have the money to put as a deposit for a property.

Surely thousands of people do this every year (I know a few)... It's easy saying "it's a string" but why???? I really don't understand

Because the mortgage company would have problems repossessing the house from you if you failed to pay the mortgage because your godparents would have a right to continue living there.