House swap with parent and move motgage

rezarf

Rollinghills wrote: »

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.

....

Never looked at it that way. I know it's easy to say we a a very good relationship, but as always anything can happen.

So what would be a better alternative?

Rollinghills

If you can afford it then buy her house for say 117k. She buys your house for 100k and repays 17k of her mortgage. You now own her house, she owns yours and is mortgage free. Simple and the ideal scenario in my mind.

If you can't afford the extra 17k but only say 10k your mother would have to take a mortgage for the missing 7k. Check some online calculators whether she would be able to. You may need to ask a broker for advice. How old is your mum and what is her income?

100k/117k is just an example, you will have to establish a reasonable value based on your local property market. It is important because it will determine the LTV and therefore the availability and interest rate of mortgages.

Thrugelmir

rezarf wrote: »

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?

Why make it so complex. Sell each other your respective houses. You obtain a mortgage on your mothers and in the process her mortgage gets discharged. Done and dusted.

rezarf

Rollinghills wrote: »

If you can afford it then buy her house for say 117k. She buys your house for 100k and repays 17k of her mortgage. You now own her house, she owns yours and is mortgage free.

If you can't afford the extra 17k but only say 10k your mother would have to take a mortgage for the missing 7k. Check some online calculators whether she would be able to. You may need to ask a broker for advice. How old is your mum and what is her income?

...

I don't think I could get a mortgage of 117k. My mother is almost 59, her income is around 7k although I'm not 100% on that could be more.

Rollinghills

rezarf wrote: »

...

I don't think I could get a mortgage of 117k. My mother is almost 59, her income is around 7k although I'm not 100% on that could be more.

117k is an example as a presumed value of your mum's house, not the amount of mortgage.

How much do you think your house is worth? If your house is roughly 80k you'd be buying her house for 97k.

Property price is to establish LTV. You will need to borrow your current mortgage balance + 17k, ie 57+17=74k will be your new mortgage).

You must be quite young so should be able to extent the term of the mortgage for better affordability if needed.

rezarf

Rollinghills wrote: »

117k is an example as a presumed value of your mum's house, not the amount of mortgage.

How much do you think your house is worth? If your house is roughly 80k you'd be buying her house for 97k.

Property price is to establish LTV. You will need to borrow your current mortgage balance + 17k, ie 57+17=74k will be your new mortgage).

You must be quite young so should be able to extent the term of the mortgage for better affordability if needed.

..

So if I did take out a new mortgage covering my existing mortgage and my mum's mortgage. Would that mean I own both properties?

If so what would this mean for my mum and living in our house?

sheramber

You buy your mother's house.

She pays her mortgage off, £17000, and uses the balance to buy your house outright. Hence no need for a mortgage.

Mum pays you for your house.
She owns that house.

You pay off what is outstanding on your mortgage,£57000, and use the balance as the deposit on her house and take out a mortgage for the balance.

Depending on your lender you may be able to transfer your exisiting mortgage to your mum's house and take out a second mortgage for any balance.

You need to start with the value of each house then then work out the figures to achieve the above.

Then the question is
Can you get a mortgage for the amount needed to buy your mum's house?

rezarf

sheramber wrote: »

You buy your mother's house.

She pays her mortgage off, £17000, and uses the balance to buy your house outright. Hence no need for a mortgage.

Mum pays you for your house.
She owns that house.

You pay off what is outstanding on your mortgage,£57000, and use the balance as the deposit on her house and take out a mortgage for the balance.

Depending on your lender you may be able to transfer your exisiting mortgage to your mum's house and take out a second mortgage for any balance.

You need to start with the value of each house then then work out the figures to achieve the above.

Then the question is
Can you get a mortgage for the amount needed to buy your mum's house?

....

Thanks for the advise, I will give me mortgage company a call and see what they have to say about it all.

getmore4less

What some people do is just swap where they live.

rezarf

getmore4less wrote: »

What some people do is just swap where they live.

...

Is that no illegal? or at least a breach of the mortgage agreement?