Parents help with mortgage

Oliviasmom

I've searched about the Internet but still confused. My parents are selling their house and buying another and will be mortgage free, making £30-40k on the sale. I am currently renting and have £5k in a save to buy isa. I was wondering if there is a provision for my parents to help me on to the property ladder, without gifting me any money towards a deposit? Either borrowing off their new house, or entering into a new mortgage with me, where I use my £5k deposit and they are joint owners? Basically can they take out another mortgage but I pay it? They are late 50s so not sure if the bank would give them a new mortgage?

Any advice would be very helpful.

csgohan4

Bad idea, your parents would have to pay the extra stamp duty and it might difficult to get a mortgage depending on their income too.


Since your parents already have a house, it would be a buy to let mortgage which are stricter in criteria. Also since the are not living there they would be your LL and need to comply to current standards and declare the income.


Why the rush to buy a house, are you ready what owning a house entails? a broken boiler or roof replacements costs thousands


5K if not much for a deposit, it would be eaten up by conveyancer fees, survey's, stamp duty e.t.c.


Keep saving and try to get a higher income.


The other option is for them to gift you a large deposit, but it really depends on how much you earn to know your budget

amnblog

Yes, there are ways they can assist you without gifting you funds.

The important thing is that you need to be earning enough to manage the new mortgage and have a good credit record.

Speak to a decent independent or whole of market mortgage broker.

Oliviasmom

I should have said, I have a partner and he has a good income, although a bit of debt. We aim to be debt free by next Nov, was just wondering if there's a quicker way with my parents. We pay £550 rent each month and have never missed any payments.

dimbo61

Have a look at offset mortgages with YBS.
The bank of Mum and Dad may need to help with the deposit
They can then put there savings offsetting your mortgage

AllyMac

I think Barclays have a product where your parents put the deposit equivalent in an account with them. It can't be accessed and it earns token interest, but it's not an actual deposit, its temporary and they then can withdraw it after x years when you have saved enough yourself, or paid off enough mortgage, or house price rises allow you remortgage with a better LTV using the new equity as the deposit.

Sorry to be vague, can't even remember where I read it!

Thrugelmir

Oliviasmom wrote: »

We aim to be debt free by next Nov, was just wondering if there's a quicker way with my parents.

Use the money to clear the debt you owe. This should allow you to save more every month. Have you opened a Help to Buy ISA?

AnotherJoe

Thrugelmir wrote: »

Use the money to clear the debt you owe. This should allow you to save more every month. Have you opened a Help to Buy ISA?

From the OPs OP " I am currently renting and have £5k in a save to buy isa."

OP there are also ways your parents can make you a loan as part of your purchase, which doesn't involve them taking out a mortgage or becoming part owner, but that would need to be long term obviously, they cant just get their money back whenever.

Are they aware of your cunning plan to relieve them of the money they thought they would be spending on cruises etc as part of their downsizing plan ?