Buying Parents House - Shared Ownership

moneymadman · 23 August 2018 at 11:56AM

Hi Guys,

Looking for some advice. My parents bought their house around 1999 on shared ownership with the housing association for £95k.

So they own half of it with a mortgage outstanding of £38k.

The house is currently worth around £160k

They have had a lot of financial problems over the years so have been on an interest only Santander mortgage for a while. This is due to end in 2024 by which time they will be 74 and 69 years old.

They aren't in a position to switch to a capital repayment mortgage but can I pay their mortgage off for them? This would mean they then fully own their 50% and the housing association own their 50%.

Im not bothered about legally owning the property, i'm an only child so the property will eventually pass to me. But i am worried about when that happens as they do have a lot of debt so when they aren't with me anymore, presumably that 50% stake in the house can be used as capital to settle their estate, which essentially i've then paid for?

Is there a way around this such as me becoming the legal owner of their 50% ?

Any advice appreciated!

foxy-stoat · 23 August 2018 at 12:01PM

If you buy £791 of premium bonds every month for the next 6 years you will have saved up enough to pay for the house when the lender calls for the £38K - they will then own their 50% share. As for the unsecured debts, they will be paid on death when the property is sold.