Gift property with mortgage

AnotherJoe

teddysmum wrote: »

With such a large amount outstanding on the mortgage would it be correct to assume that dad has no other assets ?


If so, it could be seen as a ploy to avoid paying care costs ,meaning he gets no help. Councils can look back several years at your finances (no 7 year rule, as some assume)and someone healthy at 59 can go downhill quite quickly a couple of years later.

Well, thanks for that cheery thought, I'll go bury myself in the back garden this afternoon

Keep_pedalling

Assuming your father will continue to live there the 7 year rule does not apply unless he is also paying you full market rent.

This sounds like his only major asset, so he would be stupid to give it away when he probably has another 20-30 years of living to do, and could find himself homeless if you predeceased him or you were made bankrupt or you got involved in an expensive divorce.

The sensible thing for him to do would be to downsize.

saajan_12

Adz82 wrote: »

Mortgage lender won't remove my father off and said he has to remain. - ofcourse they won't take him off, but unless he's on a fixed deal, you may be able to remortgage in your name (you raise mortgage with that or another lender, father sells you property and pays off his mortgage with the funds from your lender. So they will add me on title deed and mortgage.

Again want him on title deed also.- lender wants this or you want this?

I'm just trying to weigh my options and if I am subject to SDLT here.

Property value: 525k
Mortgage remaining: 110k repayment

My father is 59yrs old so is unlikely to get a remortgage as he's self employed also.

If we went down the remortgage route I guess new lender may put mortgage on my name but treat it as a new sale and hit me with SDLT right?

So do we go joint tenancy or just gift deed and I pay mortgage over next 15yrs remaining.

Is father happy with you paying off the £110k and gifting you the remaining £415k value? If yes, then you can raise a mortgage for £110k in your name, and buy the property for £110k which father uses to pay off his mortgage. The property is then in your name.
*SDLT is only on the £110k price paid (i.e. zero tax as its below the threshold unless you already own a property)

Note the lender may cap the mortgage to 95% say of the price paid, not the market value. In that case, you may need to buy for £116k, with the lender contributing £110k and you contributing a £6k deposit paid to your father.

This way, you have access to the new mortgage products rather than remaining on your father's standard variable rate, which is likely higher given the low interest rates these days.