Mortgage Options

mortgageoptions

I currently privately rent as a single parent which is getting more and more expensive and I'm concerned eventually I will be priced out of being able to rent at all. I can't afford to get a mortgage by myself but in time I will have my mum and my aunties mortgage free properties left to me. Is there any advice on how or if it is possible to use the equity in the two properties to use as a 'deposit' which then may give me the option to mortgage the rest of the property by myself. My family members are keen to help me to make this work as my circumstances may be completely different by the time the properties are left to me and I really need to look at my options sooner rather than later. Just trying to work out if there is any option available to us for them to help me while protecting them both at the same time. Any advice welcome, thanks. 

Albermarle

I suppose they could release money from their properties now through equity release schemes, and then gift it to you. There is a cost to these schemes of course and I am not recommending them, but it is one possible way.

One point to look out for is that anything that reduces their assets could be classed as 'deprivation of assets' if they ever need local authority care. However if they are currently well and presumably they only give away a small proportion of their assets, it is probably not an issue.

Herzlos

You can use savings to offset a mortgage, or use a mortgage free property as collateral, but in most cases they require you be the owner of the asset.

It may be worth talking to some brokers to see if there's anything you can do. I'm sure someone was offering offset mortgages where the parents held the savings account for the child with the mortgage a few years ago.

Another riskier but easier option would be for one of them to remortage their mortgage free house in order to give you enough of a deposit to get started. It'd need to be a gift with no intention for the money to be returned though

Other options are for you to buy with another family member to up your incomes or for them to help you raise money for a deposit.

Comparethemarket reckons you can get offset mortgages linked with multiple family members if enough of them have savings to get you over the line. It just says to consult your broker though rather than listing providers.

What kind of shortfall are you expecting in terms of salary to sale price or monthly payments?