Mortgage advice for son wishing to refinance mother's house/loans

rebelheart15

Hello,


My mum is approaching retirement and has a property worth around £140000. She has two loans against it, a mortgage with around £7000 to pay off and a loan with extortionate 13% interest which stands at around £20000, secured against the house. The house is owned solely by her and I'm her only child.


She currently pays £250 towards the mortgage (with four years left) and £375 a month to this dreadful loan (for another 7 years) - my dad passed away in 2010 unexpectedly, she fell into depression and stopped paying the bills, therefore leaving her in a financial pickle and having a terrible credit rating. In the years since, things have sorted themselves out and she is on top of her finances again.


We have both had an idea that my mum could sign the house over to me (thus avoiding estate issues later on) and I could refinance the loans with a £30,000-ish mortgage on a much better interest rate over 7 years. This meaning her repayments would fall and she would be able to live a more comfortable lifestyle. My mum would give me the money to pay it. She still earns around £1500 a month and will continue to work so in retirement, and in the event that anything sudden happened, she has life insurance which would pay out a lump sum. Therefore as far as I know there is no financial risk to me in taking on the mortgage.


I am looking to move back to my mum's this summer for a couple of years, and I work full time with a take-home of around £1200 a month. Although I may move out in years to come, it is the intention that the house would be in my name, but it would be my mum's home as it always has been. The brief look at mortgages I've looked at have given a repayment of around £400ish a month.


What I am trying to work out is if this is achieveable, if there is any good advice to be given and where would be a good starting point with this?


- How do we go about getting the house in my name, and is this something we would need to do before I took on a mortgage?
- Do we need to set anything up legally whereby it is my house but she has a permament right to live there?
- By me owning the house, does my mum risk missing out on any financial benefits, for example the winter fuel payment? Are there any further implications to be aware of?
- Is an income of £1200 a month enough to get a mortgage?
- I've looked into fixed, tracked, variable mortgages etc and have been completely bamboozled. What mortgage would suit my situation best?


Thank you for reading, I hope I've made sense, and any comments/advice is greatly appreached

amnblog

This is tricky.

It sounds like you intend to take the property over from mum without putting any cash in. This is a problem with nearly all lenders if mum is not moving out.

This is one for a broker.

rebelheart15

Thank you for your reply


Indeed I do want to take the property over without pushing cash in - though when (or if) I get the mortgage I would be moving in and therefore contributing to the household.


What amount of cash would I need to be putting in? And (please excuse my ignorance) what sort of problems would a lender have?

amnblog

You do not have to put any cash in, depending on your circumstances and the Lender.

You need the assistance of a broker or this will not work. It is not a simple case.

nearlyrich

Lenders don't like people living in the mortgaged property who have no financial interest in the property.