House swap with parent and move motgage

rezarf

Hi,

We (2 adult's + 2 kids) have a 2 bedroom semi-detached and my Mum has a 3 bedroom house.

My mum is wanting something smaller and we need something with 3 rooms.

We have about £57k and 16 years remaining on our mortgage and my mum has about £17k and 13 years remaining on hers.

Is there any possible way of swapping houses and taking the mortgages we have with us?

We both live in Scotland.

Thanks

Rezarf

amnblog

You sell and buy from each other.

That's it.

rezarf

Yeah that sounds easy but would this mean using estate agents and incur fees?

would it also mean selling our houses at the value of what we have remaining on our own mortgages?

Thrugelmir

Why do you need an estate agent? A solicitor yes. That's an unavoidable cost.

In principle sounds a good idea as you both get the property that suits you.

Yorkie1

No need for an estate agent.

Bear in mind that you can't just transfer mortgages. For each of you (assuming you will have a mortgage after the transaction happens), you will have to make a fresh mortgage application and be assessed on affordability rules as they apply now. Even if you are seeking to port the interest rate on an existing mortgage, that is dependent on passing the existing lending tests.

rezarf

I had a feeling it would require a fresh mortgage application.

My Mum would probably find it hard to get a new mortgage as she only works part time and lives on her own, at the time of taking the mortgage my father was alive and working full time.

Are there any other options such as:

Pay of my Mum's mortgage early due to it being the less to pay. The she could transfer house over to us?

amnblog

Everything is of course subject to affordability if either of you require ongoing mortgage lending.

If mum cannot obtain a mortgage you would need to raise all the required funds in your name against her current property.

Rollinghills

Just buy your mum's house for 17k more then the price of your current house so that she doesn't need a mortgage. Or 20k more or whatever you decide assuming you an afford a bigger mortgage.

Thrugelmir

rezarf wrote: »

My Mum would probably find it hard to get a new mortgage as she only works part time and lives on her own, at the time of taking the mortgage my father was alive and working full time.

Isn't there a sufficient differential between the properties values to leave your mother with no mortgage?

I assume that you gaining financially from the transaction.

rezarf

Yes I'm sure my mum's house would be worth anything up to an extra 15-20k as its a 3 bedroom.

Financial gain is not the objective. My mum is looking for a smaller house and us a larger house.

It would be easier but pay off my mums mortgage quicker, leaving her with no mortgage. Would my mum be able to sign house over to us so we could move in?

But then what would that mean for my mum, if she was to move into our home I would imagine it would have to be under some sort of rental agreement?

Rollinghills

Are you saying you want to own both houses?

That could be seen as deprivation of assets should your mother need to go to a care home. Also if your relationship were to break down she would be in a weak position and at her age probably not up for court battles.

I would certainly advise your mother not to go down that route.