Letter to convince underwriters

L_D_N

Hi guys,

I am buying a property with my elderly parents who are selling their house to throw in 50% of the cost of the new home as my deposit.

To get my mortgage I need to show I am buying a bigger share and that they are going to have a 2nd charge on the property and waive their ownership rights, even though we will live together. This is unless I can find a mortgage lender who would lend based on my share only.

Does anyone have any experience of this and what the letter should look like to help the mortgage get agreed?

Thanks,
L

G_M

Sounds like you need a Deed drawn up.

L_D_N

Yes, is there a particular name for the type of deed (I'm not convinced their legal conveyancer is the most helpful so anything we can direct him on would be could)?

G_M

L_D_N wrote: »

...I'm not convinced their legal conveyancer is the most helpful

'Their' legal conveyancer?

I thought it was you buying this property. If so

a) he's your conveyancer, and

b) if he's not helpful, why are you using him....??

:huh:

bouicca21

How does this sit with deprivation of assets?

G_M

bouicca21 wrote: »

How does this sit with deprivation of assets?

I'm no expert but common sense suggests they have voluntarily deprived themselves of the asset so would not qualify for care support.

But when did the law follow common sense?

AnotherJoe

It’s my understanding there are very few mortgage companies who will support such an arrangement so check with yours first. When I did something similar as the parent, I had to sign a doc saying I would NOT be living there.

Keep_pedalling

G_M wrote: »

I'm no expert but common sense suggests they have voluntarily deprived themselves of the asset so would not qualify for care support.

But when did the law follow common sense?

But if they have a second charge on the home surely we are talking about a loan rather than a gift, so they have nor deprived themselves of anything, and if nessasary can call the loan in.

As far as care costs are concerned their risk of ever having to go into care is lowered somewhat by living with their offspring, but that is offset by the fact that they will no longer have a home, which would be exempt from SF calculations if only one needed care and the other was still living in it, so a call for costs could come much earlier.

Tom99

If your parents 50% is going to be a loan that they want back, then that's how it needs to be presented and documented. If its a gift they won't need a charge on the property but the fact they are living there may cause mortgage problems.

Thrugelmir

If there's a charge on the property to protect their financial interest. Then the money isn't a gift. That's the bottom line.