Buying Parents House

Annisele

I think OP might have problems getting a mortgage - so it might be worth running this by a broker sooner rather than later.

In effect, OP is getting a gifted deposit of £344k from their parents. That'd be completely fine if it was so OP could buy some other property that the parents wouldn't be living in. But most lenders will get extremely nervous about lending in this scenario, where the people giving the gift aren't moving out. If OP stopped paying the mortgage for some reason, the parents might (with lots of emphasis on the "might"; this isn't a "will") be able to claim that the lender's rights to repossess come behind the parents' right to live in the property.

oldbikebloke

as above, the issue will be reduced number of lenders willing to accept a property occupied by previous owners. So probably best to pay a mortgage broker to find the right lender for you

as for the rest
1. affordability on 70k seems fine. 256k price paid so should still be enough left after fees from the 30k savings to give >10% deposit and therefore not restricted to mortgages for those with limited deposits.

2. SDLT on 256k price paid (a common misconception that posters think "connected person" rules apply to SDLT - they don't)

3. Gifted equity 344k counts as Gift With Reservation (of benefit) and so remain within the estates of each parents until they die or move out. Obviously as they no longer own a residence their estate no longer has a 600k property in it, but assuming it is currently jointly owned, each parents has a 128k element of their 325K IHT allowance (current rates and rules of course) already locked into the size of their estate 

4. whilst rare to end in a care home, the cultural connotation that "we will look after them" may not stand the actual test in this modern world when faced with the realities of care as mentioned by others  

5 Aged in their 60's, parents cannot expect to be totally immune to potential claim from the council for deprivation of capital if parent ends in care home and needs means tested funding 

6. Overall a reasonable idea for now given 2 year life remaining of parents mortgage and their impending financial crisis. Longer term position given age and single status of OP is guessing games. Good intents now, but no one can predict the medium term future. 

getmore4less

oldbikebloke said:

3. Gifted equity 344k counts as Gift With Reservation (of benefit) and so remain within the estates of each parents until they die or move out. Obviously as they no longer own a residence their estate no longer has a 600k property in it, but assuming it is currently jointly owned, each parents has a 128k element of their 325K IHT allowance (current rates and rules of course) already locked into the size of their estate 

Downsizing rules kick in so there is RNRB available.


 There are lenders that will consider single borrower joint proprietor. (There was a thread here where the borrowers were not on the deeds, using HSBC)

 The OP could then buy 1/2 the house everyone gets security of tenure, the GWR would be smaller or the OP could top up the purchase to eliminate that.

macman

OP could wisely build their deposit over the next 2 years in order to raise their deposit from £30K to nearer £45K, so nearer 15% rather than 10%. Much better choice of mortgages. On £70K, single, and living at home, saving an extra £650pm really should not be a problem.

getmore4less

macman said:

OP could wisely build their deposit over the next 2 years in order to raise their deposit from £30K to nearer £45K, so nearer 15% rather than 10%. Much better choice of mortgages. On £70K, single, and living at home, saving an extra £650pm really should not be a problem.

Deposit is not an issue for the deal proposed with gifted equity in excess of 50%