Part ownership of ML house

Gr33n

My partner and I live in his Mum's property (she does not live there), for which he has a small share in.

She needs to sell the house next year to release funds but has presented an opportunity to delay selling if we can contribute an additional 35% of the home value (to have a 50% share).  This will mean she won't need to sell the house for another 3 years.

The current set up has worked well as we have paid very cheap rent (to cover mortgage + bills), and if the house sells we will have to move quite far out of the area as we cannot afford to rent/buy there. This may effect my partners work, and our childcare/school arrangements.  So on the one hand delaying the urgency for us to look at these big decisions may be beneficial.

I'm not sure how buying a share in the property to delay the sale for a few years would work financially and if it would be beneficial?  Does it make sense to take out a loan/mortgage to cover the share, and hope that in a few years the property value increases and helps cover off the loan + any early repayment fees (plus some profit)?  Or are there other ways to do this?    

The alternative is we go with the house sale next year and quickly work out where we want to buy/build a life for us/our family and put our current funds into that.

Any advise or recommendations of how to approach/research this would be very much welcomed as it's quite a new area for me to understand the opportunity presented.

Thank you!

DE_612183

I presume that if you own 50% of the property rather than 15%, then you rent will decrease by 35% as well?

Not sure if you can take out a mortgage for 50% of a property - what happens if you can't pay the mortgage - the bank can't repossess half a house - I know Housing Associations can do this but not sure if a private arrangement will be possible.

How much would the personal loan be for? And how much rent do you pay now?

Mark_d

Suppose you're currently paying £500 per month to live in a £1m house - because your partner's mum has small interest-only mortgage on the place.

I think you'd run in to a number of issues getting a mortgage for 35% of the property as, amongst other things, your partner's mum's mortgage lender has an interest in the property.  Even if it is possibly for you to get an unsecured loan for 35% of the property value, it would be very expensive.

I would take advantage of your current low-cost living arrangement and starting planning your move in one years time.

kingstreet

You can't mortgage part of a property. The whole of the property would need to secure the loan and the mother would have to be a party to the mortgage if she wishes to remain a part-owner.

Brie

Or look at it from the other side and see if you could afford to buy it all from her.  

Keep_pedalling

Another consideration is your MIL capital gains tax liability on any sale.