Can we buy our parents house?

JIL

If the outstanding mortgage is £185,000 between 4 that's not loads of money.

In all likelihood the four children will inherit the property anyway.  Your parents are relatively young so a very small risk of not getting to the 7 year stage.

I know of two brothers who remortgaged their parents home, giving their parents a lump sum.  Risky I know but they said they would inherit the house anyway and wanted their parents to enjoy their retirement.

I would suggest you see a financial advisor/ broker they will be able to suggest some options. When we bought our current property, it needed loads of work and to get this house we needed to not be in a chain. We used a broker who was able to advise which building society would agree a mortgage taking into account our needs. The £500 we paid for the services to me was money well spent.

Good luck.

housebuyer143

JIL said:

If the outstanding mortgage is £185,000 between 4 that's not loads of money.

In all likelihood the four children will inherit the property anyway.  Your parents are relatively young so a very small risk of not getting to the 7 year stage.

I know of two brothers who remortgaged their parents home, giving their parents a lump sum.  Risky I know but they said they would inherit the house anyway and wanted their parents to enjoy their retirement.

I would suggest you see a financial advisor/ broker they will be able to suggest some options. When we bought our current property, it needed loads of work and to get this house we needed to not be in a chain. We used a broker who was able to advise which building society would agree a mortgage taking into account our needs. The £500 we paid for the services to me was money well spent.

Good luck.

If the other siblings are party to owning the house then if their share is more than £40k they will each be subject to the additional rate of stamp duty because I believe they said they own other houses.

kingstreet

Ellalou said:

He doesn’t have any other property, earns a good wage in IT. I was hoping one of us (other siblings) could go on the mortgage with him but don’t think that will be possible if we don’t live there and also have mortgages ourselves? 

The problem is my parents are 67 and 65 so the most of a mortgage term they would get if to go on the mortgage with my brother is probably to 75 and then we would be a very large monthly amount per month. 

I’m thinking a new mortgage altogether in my brother’s name / with or without another sibling on it may be our best option to keep the house. Then we can take it out over 20/25 years and comfortably pay it off.

The main thing I want to do is remove the financial stress from my parents and let them live comfortably in the house without having to worry. 

Surely there is a way! 

Three party mortgage - parents and brother. His income meets affordability and their incomes aren't needed = longer term. He can be borrower alone, or added to ownership by transfer of equity. Any decent broker should be able to see this from your description.

Ellalou

kingstreet said:

Ellalou said:

He doesn’t have any other property, earns a good wage in IT. I was hoping one of us (other siblings) could go on the mortgage with him but don’t think that will be possible if we don’t live there and also have mortgages ourselves? 

The problem is my parents are 67 and 65 so the most of a mortgage term they would get if to go on the mortgage with my brother is probably to 75 and then we would be a very large monthly amount per month. 

I’m thinking a new mortgage altogether in my brother’s name / with or without another sibling on it may be our best option to keep the house. Then we can take it out over 20/25 years and comfortably pay it off.

The main thing I want to do is remove the financial stress from my parents and let them live comfortably in the house without having to worry. 

Surely there is a way! 

Three party mortgage - parents and brother. His income meets affordability and their incomes aren't needed = longer term. He can be borrower alone, or added to ownership by transfer of equity. Any decent broker should be able to see this from your description.

Thank you. We need to see a specialist mortgage broker and see what we can do. Sooner rather than later.

JIL

housebuyer143 said:

JIL said:

If the outstanding mortgage is £185,000 between 4 that's not loads of money.

In all likelihood the four children will inherit the property anyway.  Your parents are relatively young so a very small risk of not getting to the 7 year stage.

I know of two brothers who remortgaged their parents home, giving their parents a lump sum.  Risky I know but they said they would inherit the house anyway and wanted their parents to enjoy their retirement.

I would suggest you see a financial advisor/ broker they will be able to suggest some options. When we bought our current property, it needed loads of work and to get this house we needed to not be in a chain. We used a broker who was able to advise which building society would agree a mortgage taking into account our needs. The £500 we paid for the services to me was money well spent.

Good luck.

If the other siblings are party to owning the house then if their share is more than £40k they will each be subject to the additional rate of stamp duty because I believe they said they own other houses.

I fully appreciate what the op is trying to do and there will be a number of options available to make it happen.  

I'm sure a good broker will be able to spell out the advantages and disadvantages to a number of possible scenarios.

clueless_but_curious

Ellalou said:

Thank you. We need to see a specialist mortgage broker and see what we can do. Sooner rather than later.

I recommend, before seeking any advice, you and your siblings have clarity on what you want to do in the future when it comes to selling, presumably after the death of your parents.  The passage of time can change things and life events can mean one party may wish to withdraw their equity at any point.  All of this needs to be factored in to whatever transaction is structured.  This is an IHT minefield and you should consult a tax accountant that specialises in trusts and estates, unless you are confident that the values involved are comfortably covered by their Nil Rate Bands

I don't see the merit of a broker.  I think you need to map out the current consensus (if any) and then plot eventualities and take yourself off to a tax lawyer or tax accountant unless the answer very clearly presents itself