equity release mortgage transfere of deeds

tomcoleman

hi,


my parents are transfering their deeds to me and 2 others on their home.


They have zero mortage.


The deeds will be split between 3 in a 33% stake each.


All parties have agreed that i can do this if i want but i dont know if its possible.


I currently have my own personal mortage.


My parents will still live at the property.


Is there a way i can release equity on the home, im looking to release £100k which is well within the LTV.


I would like to take out a mortage on the property but dont know if its technically possible.

AnotherJoe

The first question is "why".

If its to evade care home fees or IHT its not going to work.

The answer to your Q's are "no" and "no".

kingstreet

You can't borrow against a one third share, so the other two shareholders would have to be party to the mortgage.

Many lenders will have an issue with your parents continuing to reside in the property as well.

What exactly are you trying to achieve?

tomcoleman

AnotherJoe wrote: »

The first question is "why".

If its to evade care home fees or IHT its not going to work.

The answer to your Q's are "no" and "no".

why - to give the (me) children cash to help with our own homes/lifes.

kingstreet wrote: »

You can't borrow against a one third share, so the other two shareholders would have to be party to the mortgage.

Many lenders will have an issue with your parents continuing to reside in the property as well.

What exactly are you trying to achieve?

they want to give money to us children from their home, they struggled to get a mortage due to their age 67.


They thought best that we take out a mortage as we are young, take the cash todo our own home improvements and they will pay the bill (both still working)


all shareholders are in agreeence as stated above. :T

getmore4less

Disaster in the making.

If they want to give you cash they need to sell or mortgage.

kingstreet

Seek professional advice. This will be a tricky proposition.

The shareholders agreeing and the shareholders accepting liability for a mortgage are not necessarily the same thing. Joint and several liability means acceptance of 100% of the debit even if each person receives only 33% of the funds.

As stated, there will be issues with your parents' continued residence. The transaction is potentially voidable in the event of 'foreseeable need' for care provision and unless they pay a market-level rent, the value of the property will remain in their estate for Inheritance Tax purposes, regardless of the 'gift'.

You'll need legal, tax and mortgage advice.

Age is not a barrier to a mortgage if they have the affordability. I can think of at least one lender which will lend to 80 and there are now 'retirement interest-only' products where you could pay the interest for them.

tomcoleman

getmore4less wrote: »

Disaster in the making.

If they want to give you cash they need to sell or mortgage.

kingstreet wrote: »

Seek professional advice. This will be a tricky proposition.

The shareholders agreeing and the shareholders accepting liability for a mortgage are not necessarily the same thing. Joint and several liability means acceptance of 100% of the debit even if each person receives only 33% of the funds.

As stated, there will be issues with your parents' continued residence. The transaction is potentially voidable in the event of 'foreseeable need' for care provision and unless they pay a market-level rent, the value of the property will remain in their estate for Inheritance Tax purposes, regardless of the 'gift'.

You'll need legal, tax and mortgage advice.

Age is not a barrier to a mortgage if they have the affordability. I can think of at least one lender which will lend to 80 and there are now 'retirement interest-only' products where you could pay the interest for them.

thanks for the advice, i'll have a look at the products and see if they can do it themselfs

AnotherJoe

tomcoleman wrote: »

why - to give the (me) children cash to help with our own homes/lifes.

But they arent giving you cash are they? they are giving you a share in a house thats useless to you unless all three of you evict them and sell it.
Even if all three of you wanted to get a mortgage on it (and that has all sorts of potential issues down the line, a complete nightmare) you wont be able to whilst they are living there.

tomcoleman

thanks all

AnotherJoe

I hope you can put a stop to this idiocy before it all has to be backtracked at additional cost. Worse case there might even be extra SDLT due in both directions. I take it you and other siblings already own homes?

AnotherJoe

If they want to give you the cash now then equity release or RIO or similar scheme and then they/you pay the monthly charge to avoid the interest rolling up and eating the rest of the equity.