Kids buying part of my house

stanmore_2

I would like to help my kids to get on the property ladder by selling two thirds of my house to them whilst retaining my one third share of the property.

We all live together anyway, so the 'rent' that they pay me currently would effectively pay their share of a new mortgage. The new mortgage would enable me to pay off my current mortgage and it would leave me debt-free.

If and when we all decide to go our own separate ways we would divvy up the proceeds of the sale after paying off their mortgage.

If this happened within say a 3 year period they would at worst have lived on reduced cost basis. After a longer period they could even see a profit and we would have the increase on our original equity, plus the original stake.

Having run this idea passed a mortgage broker, we've been told that it isn't possible because mortgage lenders would not like the idea of 'sitting tenants' who have equity in the house.

Any thoughts?

kingshir

No advice I'm afraid but what a shame it doesn't seem possible. It looks like such a good idea!

silvercar

Sitting tenants with equity in the house = joint owners in plain english.

It wouldn't be a straight forward remortgage as the ownership changes, but I don't see why it should be a problem. Three owners, three names on the mortgage - sounds logical.

There are inheritance tax implications, if you didn't survive for 7 years and there could be problems if you needed residential care in the near future but these problems could be sorted with appropriate insurance.

Either the broker didn't understand or you need a second opinion.

I am assuming that the children are over 18 to be able to hold the property in their own names.