Two mortgage help

Janboi

Hi I'm currently remortgaging my own property 175k with 145k outstanding. think I have a good rate with natwest at 2.2.
The problem lies with my mums property that is worth around 105k with only 37k outstanding. Due to her being self employed not earning enough by herself and getting on in years she is struggling to get a good deal. She was planning on using her pension to help with this but this is no longer available thanks to new pensions.
I have offered to remortgage it for her and have both of us on the dead in order to get a better rate and lower there repayments so they can enjoy there retirement in a few years.

Is there any way of combining the two or getting a better deal for us both. Any help

AnotherJoe

If you go on the deeds of your mums house you'll have to pay an extra 3% stamp duty. Thats if a mortgage company would loan to you and that's dependent upon your earnings and outgoings.

Why do you want to go on the deeds anyway? Can't you just help your mum to pay off her mortgage directly the old fashioned way by giving her cash? If you want that to be recognised in case of care home fees etc, get a legal agreement drawn up whereby it's recognised that your contributions to her mortgage are a loan against her property.

Janboi

We did initially look at just helping them but then we realised that they would not give her a longer mortgage term or remortgage with just her wages as it's not enough. The adviser said I had to do the remortgage to get the better deal and longer term.

I'm not concerned about dreads or who gets what just the best way of paying there mortgage off and making there repayment lower to help them save more now for retirement in a few years.

AnotherJoe

So the adviser has given you advice about what to do? So why aren't you doing that ?or at least post what they said here so people aren't double guessing you.

I take it simply paying more money so her mortage gets paid off quicker isn't an option ??

csgohan4

downsizing an option for your mother?

Janboi

This is my first time using a forum. Wasn't sure what or how to put my question across apologies.

Yes I could help overpay there current mortgage but they are fixed in for another 5 years unless I help her remortgage. And they are locked into a rate of 4.47 for the next five or pay to get out and remortgage that's where I come in.

They have already down sized and are happy paying current mortgage, we were just trying to get there rate down as to ease the on coming years of retirement. And pay the mortgage off so we could give them a decent retirement and possibly have something to leave for there other children. Should the worst happen

. I just thought there might be some way of combing our mortgages or somethings hence my original question.

AnotherJoe

And what did the mortage adviser say ?

Bottom line though it all comes down to how much money you've got, what your earnings are. Also you say your mum was looking at pensions to help but "with new pensions" this wasntt an option. Do you just mean there is a gap of 5 years to bridge? Can you just help through that gap?

There's so many variables to know though. How big is the early repayment charge? What would a potential remorgage Costa nd would that cancel it out? Add in ten stamp duty as well. How much could your mum afford? If other children would get the property why don't they contribute instead of you ? How old is your mum? How long has the mortgage got to go? How old would she be when the mortage is paid off?ettc etc.

What did the mortage broker advise was possible on your salary? Is it even affordable?

AnotherJoe

Janboi wrote: »

This is my first time using a forum. Wasn't sure what or how to put my question across apologies. Detail is whats needed whether its to a mate in a pub or a forum people cant give useful opinions on this plan or that plan without understanding the numbers.

Yes I could help overpay there current mortgage but they are fixed in for another 5 years unless I help her remortgage. And they are locked into a rate of 4.47 for the next five or pay to get out and remortgage that's where I come in.

They have already down sized and are happy paying current mortgage, we were just trying to get there rate down as to ease the on coming years of retirement. And pay the mortgage off so we could give them a decent retirement and possibly have something to leave for there other children. Should the worst happen

. I just thought there might be some way of combing our mortgages or somethings hence my original question.

Just to add. There doesn't seem to be enough equity in your current home so there's no way you can borrow enough against the value of your house to pay off some or all of hers, and if you borrowed a bit more and gave her a lump sum you'd end up with a higher rate which would probably wipe out her gain since your mortgage is so much larger. So its probably not worth doing anyway.

Also, if you can switch her to a lower rate so she paid less, you've got to balance that against the cost of a new mortage plus the ERC to get out of the fixed period. If you could lower her mortgage rate by 3% you'd save £1100 a year but what is the ERC and how long has it got to go anyway (not just the 5 year lock in period). Bottom line it may not decrease her spending by that much anyway, I suspect you just think it would without doing the maths.

Better to look at how much she has to pay and work out a plan for how that can be wholly paid off over whatever time frame seems reasonable. And consider downsizing.

Janboi

Thank you again I will get more details and make sure I have all the details you guys need before making a apparently very open ended question.