Can I get a mortgage on a part share of parent’s property?

JackRS · 13 August 2018 at 12:04PM

I'm looking for your views on this idea and if it!!!8217;s the sort of thing you could get a mortgage for.

Obviously it's complex but I will attempt to simplify (believe it or not!). My parents will states that their estate is divided in a 3 way equal share to me and my 2 sisters.The estate is basically the property, so if one of us wants to keep the property we would need to buy out the other 2 when the time comes.When the time comes it's unlikely that any of us could buy the others out especially as we'll all be retired and have little chance of a mortgage then.

One possibility could be to buy two thirds of the property now while they live there with an agreement that the remaining third is passed over in the terms of the will. This provides cash to my parents to do as they wish, maybe give to my sisters or help fund their later life care etc many options obviously but not the point of this post.

The reason for the post here is to get a view on if it's something a mortgage lender would get involved in? So Basically I would be asking for a mortgage to buy a 66% share of a property that I wasn't living in?Appreciate deposits and affordability would be all be part of consideration and there would need to be appropriate contracts in place to keep it all clear but is it something a lender would do?

csgohan4 · 13 August 2018 at 12:23PM

unlikely, if one was to default, how will the lender get back their share ?? You can't sell a bit of a house on the open market.

1 option is to get a clean break and sell the house on the passing of both parents and that will be fair, dividing it up and getting mortgage on a bit is a little complex and money and family should never mix.

JackRS · 13 August 2018 at 12:43PM

Thanks, yes that's what I wondered but maybe it had been done before? Ideally we wanted to keep the property in the family but like I said many years from now when the time comes non of us would be able to buy the other out.

sparkey1 · 13 August 2018 at 12:45PM

Stamp duty rules are complex. But if you buy now, you will incur stamp duty charges, legals etc.

If you wait, you could inherit and not pay.

I dont think any bank will lend to you. if you default, they cant sell two thirds of a house. Your parents would have to be guarentors, its incredibly complicated.

Although I am thinking you could get planning permission, split the house and title, but that would splitting the home into self contained flats and that is not what you are after if my understanding is right

getmore4less · 13 August 2018 at 1:06PM

If the property is mortgage free there are options where the parents become the lender.

JackRS · 13 August 2018 at 1:41PM

Thanks for your comments.

What if effectively my parents sold it to me at 66% of market value basically giving my inheritance now, then I owned it 100% that way could a lender be interested obviously many other issues and contracts etc but in terms of a mortgage?

somethingcorporate · 13 August 2018 at 1:48PM

Deprivation of assets issues if they ever required care.

Can I get a mortgage on a part share of parent’s property?

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