Borrowing on mortgage to buy parents freehold

[Deleted User]

My parents are mortgage free on a property worth around £150k.Unfortunately they've let the council owned lease run below 46 years left. I have offered to buy the freehold by borrowing £7500 (the cost of the freehold as set by the council) against my current mortgage. Are there any pitfalls in me doing this ? My parents don't want to sign the house over and they don't intend to downsize. They're both 77. Am I doing the right thing ?

AnotherJoe

I have offered to buy the freehold by borrowing £7500 (the cost of the freehold as set by the council) against my current mortgage. Are there any pitfalls in me doing this ?
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Yes, you'll have to pay back £7500 plus interest !

However assuming you have a good chance of inheriting this property, this would seem to be a very reasonable investment. Having said that, will the mortgage co let you extend your mortgage? Also they might not be keen on you using it for this purpose, effectively buying another home, so it might be better if it was in fact for improvements to your property, perhaps a new kitchen or similar, if you see what I mean?:D

Then after you changed your mind and gave it to your parents, you'd need to make sure they did in fact spend it on that. I presume you'd trust them that far?

The only other observation I'd make is, dont you have £7500 saved up? In which case does this imply you are financially living close to the edge and will you be able to afford these repayments and any future to be expected events - new boiler, repairs, etc?

[Deleted User]

I will inherit the property....and yes I was going to tell the mortgage co. that it was for home improvements. Because the lease has fallen so low I've been told that the house can be sold to cash buyers only when they depart this planet as banks won't lend on it....and where the house is located its worth a fraction without the freehold hence losing out on a lot of money ...eventually to be passed onto my son. I was thinking about the interest too....do I just bite the bullet and pay it after all I'll hopefully sell the house for it's full value in the future. Its a morbid subject I know but has to be dealt with.