Buying out the rest of my mums mortgage

hc07yer

Hi there,

My mum recently got ill and had to retire. This unfortunately means she will be unable to renew her mortgage when it is due next year. 

We have been discussing the idea of me getting a mortgage on the remainder of the property (around £260,000) so that she does not have to move. I would move in with her initially to get the mortgage.

I have a few questions.

1. Is this legal?
2. Will it be easy enough for me to get the mortgage? I earn around 70,000 and have about 35,000 saved.
3. I do not own a property already, will i be able to use my stamp duty relief?
4. How does the ownership of the house work? Would it be best for her to transfer full deeds over to me? Could this save me from inheritance tax down the line.

Are there any other things i need to consider?

Thanks

la531983

You need to factor in you will lose any first time buyer status if you want to buy somewhere else at some point.

born_again

Does your mother have enough income to continue paying the mortgage & other bills if you do nothing?

If you buy her out, then what would be your plan should you want to move or meet someone?

hc07yer

born_again said:

Does your mother have enough income to continue paying the mortgage & other bills if you do nothing?

If you buy her out, then what would be your plan should you want to move or meet someone?

No, if i dont get a mortgage on the remainder she would need to sell her house and move somewhere smaller/further away. As she has health issues I would like to avoid that happening.

She would contribute towards the mortgage and hopefully allow me to save some more money for my next home.

hc07yer

la531983 said:

You need to factor in you will lose any first time buyer status if you want to buy somewhere else at some point.

I assumed as such, thanks for the help.

Hoenir

When you say renew the mortgage. Has the mortgage term come to the end? Is the mortgage currently interest only? 

Herzlos

The cleanest thing would probably be for you to buy the house from her, with her gifting you the equity back. Then you'd take ownership of the house and take out a mortgage debt in line with her current mortgage.


Another thing to consider is the future; if she has to retire due to illness, is the house suitable for her needs now and predicted needs in the future? Would she benefit from a smaller place to look after, smaller garden, less stairs, that sort of thing? If so then it may be worth looking at her selling that house now and gifting you the equity to go towards a more suitable place.

It's a difficult conversation to have, and moving is awful, but you're better doing it now than in a few years time.

hc07yer

Hoenir said:

When you say renew the mortgage. Has the mortgage term come to the end? Is the mortgage currently interest only? 

The mortgage term will come to an end in the next 12 months. She is currently on interest only. Yes. Sorry for the late reply! 

hc07yer

Herzlos said:

The cleanest thing would probably be for you to buy the house from her, with her gifting you the equity back. Then you'd take ownership of the house and take out a mortgage debt in line with her current mortgage.


Another thing to consider is the future; if she has to retire due to illness, is the house suitable for her needs now and predicted needs in the future? Would she benefit from a smaller place to look after, smaller garden, less stairs, that sort of thing? If so then it may be worth looking at her selling that house now and gifting you the equity to go towards a more suitable place.

It's a difficult conversation to have, and moving is awful, but you're better doing it now than in a few years time.

I don’t think I could get the mortgage for the whole amount of the property worth. That’s around 700k. She has 250k left to pay so I was planning on getting a mortgage for the remaining 250k. Would she then transfer the rest of the property over to me? 

I appreciate your feedback on the health concerns. She is better now but is too old to work now.