Buying a house with parents

Cre

Hi,

My husband and I are selling our house. My parents are selling their house and we are looking to move in together.

We would need a mortgage that amounts to 30% of the total new house value. But my parents are mortgage free and we would like them not to be added to the mortgage.

My parents would be happy just to give us the money but I would like their position to be protected.

They would be happy not to be on the title if this is best but equally wouldn't mind being on it if this is a better position.

We know about joint ownership but fear this may cause issue with the mortgage? So thought a deed of trust may be the best way forward. However would this be counted to increase the inheritance tax threshold in the future (current estate below normal threshold but looking to the unknown in the future)

Mortgage company won't advise at this stage they just want to know what we are doing when we've figured it out. Solicitor won't give us specific advice on what is best to do and don't know who else to ask!

Any advice on what to do or even on who to ask would be greatly appriciated!!!

LandyAndy

No mortgage company is going to accept owners who are not a party to the mortgage.

Cre

That's what I thought so not being on the title but having a deed of trust may be the only way forward?

LandyAndy

How old are you all?

It won't affect the legal position but the decision as to whether it is a good idea to live together may be very different if the couples are 60s and 80s or 30s and 50s, say.

Cre

Deed of trust would be out of equity not out of mortgaged portion

Cre

Husband and I are late 30s parents early 70s

xylophone

Might it be easier all round for your parents to buy outright a property suitable for their needs and for you to move close by?

One couple I know bought a house next door to their elderly parents.

Anther elderly couple of my acquaintance bought a ground floor flat within a few minutes walk of their son and wife's property.

glentoran99

LandyAndy wrote: »

No mortgage company is going to accept owners who are not a party to the mortgage.

Surely they do all the time in co-ownership arrangements, which is essentially what this would be

Cre

This is not a practicable or financially viable option really. Parents are looking to live on the ground floor so woukd be looking at a bungalow which are hugely expensive in the area we are looking to go.

We are happy with the property we are buying and it suits us all for various reasons both bow and in the future. We are just keen to do everything by the book and not get ourselves into trouble down the line.

Cre

It's almost like the system wants us to unintentionally fall foul of inheritance tax rules in the future...

davidmcn

glentoran99 wrote: »

Surely they do all the time in co-ownership arrangements, which is essentially what this would be

Not sure what sort of set-up you're referring to as "co-ownership arrangements" (shared ownership?), but normal residential mortgages are aimed at borrowers who are one and the same as the owners. Legally other things are possible, but there are regulatory headaches e.g. in this example, the parents arguing that they weren't aware "their" property would be at risk because of the OP's defaults on their loan.