Buying 1 parent out the house, 2 on deed 1 on mortgage

Mjim

Situation - my parents own a property, they are mortgage free. 

They have split up to need to sell the house and split the amount 50/50. 

Let’s say for ease the property is £500k so they have £250k each.

One parent wants to stay in the house so I want to know if it’s possible to buy with the parent staying in the house. 

The parent wanting to stay is in their 70’s. 

Is it possible to have us both on the deeds and just me on a mortgage? I have a 20k deposit but will need to mortgage the rest. 

I also want to know how the process would work, would the house need to be sold and resold to us both? Or would it work as a transfer of equity? 

I also want to know how stamp duty would work as surely the parent wouldn’t be liable to pay stamp duty as they already own the property and as I am a first time buyer I would only have to pay 5% on anything over £425k if I’ve read that correctly? 

Keep_pedalling

Are you planning to live with the parent? If not this sounds like a terrible idea. 

DE_612183

so you want to sell the property for 500k, then you and your parent ant to buy it using their £250k and your £20k as a deposit.

The remaining £230k is on a mortgage in your name only?

Sarahspangles

Mjim said:

Is it possible to have us both on the deeds and just me on a mortgage?

No, or at least the mortgage holder won’t allow that. They will want first charge on the property so they can repossess if you can’t pay the mortgage.

Normally when long term couples split there is more at stake than a house. Pensions in particular have value. What would your mother have to live on, can she afford the other bills and upkeep on the house?

What happens if your mother needs care and this has to be funded with capital from the house?

 

Brie

both of you would need to be on the mortgage if both your names are on the deeds.

But as Sarahspangles says what's P1 going to live on? 

Presumably there are other assets, a pension that will need to be split perhaps.  So a legal agreement for how both their assets are being split (not just the house) needs to happen.

Then you might need a mortgage broker to help find a product that allows for a mortgage for someone in their 70s and beyond.  They do exist so it's not impossible.  

Then there's the complications  = what if P1 gets a new partner, gets to ill to remain in the house?  What if you get and/or leave a partner, die, become too ill to work?  Are parents getting a divorce or just separating?  Wills, POA all need to be in place for everyone.  

silvercar

It’s called a transfer of equity. More commonly done when a relationship breaks down and one person stays and their new partner moves in and takes over the share of the property that was previously belonging to the ex.

In your case, you would both need to be on the deeds and the mortgage, but it is possible to do. There is no CGT to worry about as the one leaving has lived in the property as their main residence for the whole time of ownership.

Mjim

DE_612183 said:

so you want to sell the property for 500k, then you and your parent ant to buy it using their £250k and your £20k as a deposit.

The remaining £230k is on a mortgage in your name only?

Yes exactly that!