Buying a share of an existing mortgage

konkontiba

MY MOTHER HAS A MORTGAGE WHICH ENDS IN LESS THAN 24 MONTHS TIME. SHE HAS £50K OUTSTANDING BALANCE TO PAY OFF.

MYSELF AND MY SISTER ARE BOTH KEEN TO BUY THE PROPERTY OFF HER AS FIRST TIME BUYERS.
SHOULD WE ARRANGE TO PAY OFF THE £50K BALANCE, OR SHOULD WE GO FOR A MORTGAGE TO BUY OFF THE PROPERTY COMPLETE AND HAVE NO TIES WITH MUM. SHE LIVES IN THE HOUSE, BUT WE DONT.

WE ARE BOTH SINGLE AND HAVE NO CHILDREN WITH A JOINT INCOME OF £46K. THE HOUSE IS WORTH ABOUT £220K, AND HAS A POTENTIAL FOR A FUTURE FAMILY HOME AND WE DO NOT WANT TO LOSE OUT ON IT.

ANY ADVICE OR SUGGESTIONS WILL HELP.

UK007BullDog

Its your moms. Why would you think you would lose out on it? You will inherit it one day?

Your mom might want to use the property in the future to pay for care or to supplement her income. Is that what worries you? She would have to agree to it but I sure hope you will not throw her out once you bought it off her.

Also if you and your sibling buy it who gets the right to live in it? Who gets married first? Has the first kid?

Or are you worried about inheritance tax in the future.

Things like this can always turn ugly under siblings.

All 3 of you need to take legal advice.

Conrad

Where will your Mom live?

If she lives in the house, remember the home insurance must reflect the true residence circumstances. Will you tell the lender she will remain living there?

happybroker

He's quite correct, with all the best will in the world these things can cause problems in the future so plan this really carefully and talk about the things you don't want to like "what happens if we fall out?"!

Does your Mum have the means to repay the mortgage? Is that what is worrying you?

If she does what's the hurry?

If not, speak to a profesional. You will all need to have legal advice and I would be surprised if any self repsecting lender would grant the mortgage without making it a condition that you do so.

You may have to pay for certain types of indemnity to protect you and the lender against future actions against Mum (who I am sure is very nice).

It's a much more complicated process than you might think so speak to some one who knows their onions. Ask friends and family if they can recommend a whole of market broker to you.

Good Luck

konkontiba

Thanks guys for your informative advice on the subject. Mum actually wants to downgrade and get a smaller place. She doesnt actually have the funds to pay off the mortgage at the end of the term. Hence she has decided to sell, settle the outstanding balance, and get herself a smaller and cheaper place.