Buying a multigenerational home - deed and mortgage advice

quietfool

Hi all, I'm currently in the process of buying a house for three generations of our family to be together - my parents, myself and my young daughter. We've been living together already for some years, so we know that it works relationship-wise, and everyone is in good health for the moment. We have had an offer accepted on a property and are proceedable, on the basis of a large deposit that is about 30% from me and 70% from my parents. The challenge is, we need a mortgage to reach the house cost. Based on the deposit and my income, a mortgage is doable no problem, but my understanding is it would need to be in my name only as I'd be responsible for repayments, as my parents are both mid 70s and retired. However this means they couldn't be on the deeds of the property, which is understandably concerning for them as a significant portion of the asset would be theirs, and because of their long term security in case something happened to me. 
I am exploring if there are alternative mortgage products that could work in this uncommon situation, and also if we can mitigate the risks via really good life insurance/mortgage protection. I also need to think about the interests of my daughter of course.
Any advice or suggested avenues to explore would be gratefully received!

lincroft1710

Your parents could be both on the mortgage and the Land Registry entry (deeds are no longer used as such). "Mrs" Lincroft supplied a sizeable amount for the deposit on our house and was on both even though she made no contribution towards the mortgage payments.


How old is your daughter? 

quietfool

she's four thank you for your response The early enquiries I've done with mortgage providers have said if one/both of my parents were on the mortgage it would greatly limit our term due to their age, tripling repayments. I keep hoping there is an alternative out there!

poseidon1

quietfool said:

she's four thank you for your response The early enquiries I've done with mortgage providers have said if one/both of my parents were on the mortgage it would greatly limit our term due to their age, tripling repayments. I keep hoping there is an alternative out there!

The mainstream lenders tend to have pre defined categories of people they will lend to and the criteria they apply depending on what 'tick box' you fall within.

Accordingly,  see link below to a new lender called Perenna whose progress and offerings I have been following for a couple of years now.

https://perenna.com/about

You will probably need to see a mortgage broker to access Perenna, but I have noticed ( for example) that they have no problem offering long term fixed rate mortgages to retirees.

As for pricing of their mortgages they are not the cheapest ( in terms of the fixed rates) but given your less than straight forward family circumstances,  they maybe one of the few lenders prepared to offer a long term mortgage by reference to your life span rather than your parents.

I should imagine as the primary mortgage payer, mortgage life assurance on your life will be a must, as well as separate life cover to provide separately  for your  young daughter. However, although you can cost effectively cover premature death, what about long term sickness that might effect your ability to fund the mortgage? These are the sort of matters ( together with associated costs) you will need to discuss with a suitable broker/adviser.

In the meantime see below Perenna's mortgage costings as of November 2024. A broker should be able to provide a more updated position.


https://static.perenna.com/rate_table_7_november_2024

quietfool

Thank you for this! I've found a broker who provides perenna products so will certainly investigate this option

Murphybear

Hi

Sorry I can’t offer any technical advice but want to say it’s a brilliant idea and I wish you luck.  

SarahB16

quietfool said:

Thank you for this! I've found a broker who provides perenna products so will certainly investigate this option

Would a 'tenants in common' mortgage be an option too? 

quietfool

I've not been able to find out much about tenants in common mortgages other than a few obscure references, and the 2 mainstream brokers I've spoken to haven't seemed to know about/offer them. I've got an appointment lined up with another broker this week who seemed a bit more confident he could offer more unconventional products - but will see!

SarahB16

quietfool said:

I've not been able to find out much about tenants in common mortgages other than a few obscure references, and the 2 mainstream brokers I've spoken to haven't seemed to know about/offer them. I've got an appointment lined up with another broker this week who seemed a bit more confident he could offer more unconventional products - but will see!

You need to speak to a more qualified person if they've never heard of tenants in common mortgages.  Here is a link that provides you with more information and I think it would definitely meet your requirements.  

Tenants-in-Common Mortgages Explained | MoneySuperMarket