Buying a property as a family.

pompeymj

Hi all,

I'm looking to buy a property with my parents and my sister, between us we have sufficient funds to purchase approximately 80% of the property in cash, with the remainder being made up by a mortgage.

We are getting conflicting advice regarding the legal side of things.

Ideally we would like the mortgage only in my sister and my name as this allows for 25 year term. The solicitor has advised that we need a 4 person mortgage which isn't appealing on the affordability side of things as my dad is 9 years from his 75th birthday.

Our parents will be protected by a trust declaration but I understand that it wouldn't be possible for their names to be on the deeds if they aren't paying the mortgage?

Any advice to solutions would be appreciated.

Mike

Pixie5740

Have you spoken with a mortgage broker yet? Most, if not all lenders will want everyone named on the deeds to be named on the mortgage too.

pompeymj

Our mortgage broker has gone ahead with just the two names to get 25 year term. He has said my parents can be protected by the deed of trust and/or with a charge against the property after completion.

AdrianC

As Pixie says - if your name's on the deeds, your name needs to be on the mortgage. Without that, the lender would have a hell of a job repossessing if it was ever needed.

Given the tiny LtV, and the number of earners paying, I can't see your father's age being a big issue, but an independent broker would tell you for sure.

One question... If a very large proportion of your and your parents' assets are going into the property, what happens if they need residential care?

pompeymj

Adrian,

The repayments on a 9 year mortgage are manageable but we would rather stick to the longer term and just 2 names.

Both parents have significant personal pensions which are untouched in terms of their later life care.

Pixie5740

I'm surprised that the mortgage broker thinks it's ok for your parents to gift (although all the talk of charges against the property makes it sound like a loan rather than a gift) part of the deposit, live in the property and not be named on the mortgage. I'm not a mortgage broker though so if he says it's possible then it must be possible.

What does your solicitor say about the mortgage broker's proposal where your parents are not named on the mortgage but instead have a charge against the property? Is he saying that it's not possible?

pompeymj

Pixie,

Well this is the confusion. Obviously we want our parents to be protected regardless but as you say they can't be on the deeds if they are not on the mortgage.

The proposal has made the solicitor uncomrtable and he is of the opinion that if this is the route we follow then he can't represent both my parents my sister and I due to a conflict of interest.

I'm thinking the only way to proceed is without the mortgage by raising funds by other means and leaving all 4 names on the deeds as 100% cash buyers.