Transferring mortgage from parents to children

alien2012 · 21 October 2010 at 12:58PM

Hi,

Is it possible to transfer mortgage from my parents name to my name without selling the property to me? I do not have enough cash for deposit. Otherwise, would have just bought the house or get my parent to gift it to me.

I would highly appreciate if anyone can provide me some options or reading materials to give me a basic idea of transferring my parent's property under my name before I discuss with a solicitor (who may say there is no way after taking a few hundred quid of my hard earned money!)

[FONT=&quot]Thanks

[/FONT] Can they gift the house to me with an outstanding mortgage? Won't the bank say the bank owns the property until mortgage is paid off? Therefore, they cannot gift the house? Or, they can gift it and I continue to pay their mortgage until the mortgage is paid off fully.

Parents are emigrating to a non EU country where they bought properties and other assets. They want me to take over everything (but they are not in a position to help me financially anymore)
Property value £170k
Income £25K
Savings: none yet (which is why I can't buy the house as I do not have money for deposit yet)[FONT=&quot]

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getmore4less · 21 October 2010 at 1:03PM

No you cant the lender won't let you have a mortgage on a house you don't own.

Why do you want to do this?

Why cant they just gift you the house and you take out a mortgage?

Whats the value, mortgage and your earnings?

JustJewels · 21 October 2010 at 2:32PM

Hello alien2012,

No, it is not possible to do what you want. If there's a mortgage on the property, the lender has a charge listed on the land registry title, and no-one can transfer it without the lenders permission; which it won't give until mortgage has been repaid.

Only way to transfer is pay off mortgage in full, then transfer to you, and then, after 6 months of owning, you may or may not be able to get finance on the property in your own name.

Is the property rented out, or is it the family home?

JJ

GMS · 21 October 2010 at 2:51PM

You could purchase the property from your parents for below the market value using a 'gifted deposit'

Basically the lender would lend against the valuation with the deposit being the amount of gifted equity.

How much would you need to pay them for the property?

Raggs_2 · 21 October 2010 at 2:53PM

From what I understand there isn't an issue between you and your parents for you to purchase the property from them, you're concerned about the banks etc for this point.

Your parents can sell you the house at below valuation (i.e. the mortgage level), with the difference being classed as a gifted deposit. Not all lender will do this. The more equity they have in the home the more likely it is I guess.

alien2012 · 21 October 2010 at 3:41PM

Thanks for the quick replies. I do not need to pay anything to my parents as they are giving it to me for free.

O/S mortgage is about £60k (I guess the effective cost of property for me is £60K). So I will try the part gift and part mortgage approach (unless there is any other easier way).

Now, where do I start to initiate the process? Solicitor or the lender? Sorry if I sound clueless about this. I am willing to do my homework if anyone kindly guides me to the right direction. I am still in my early 20s (but have maintained a good credit rating and have access to borrowing with credit limit exceeding £15k. So 60K mortgage should not be a problem; hopefully!).

GMS · 21 October 2010 at 3:46PM

You would be advised to speak to a 'Whole of Market' broker.

Not all lenders will allow the transaction so you need to make sure you do not apply to unnecessary lenders and incur costs.

getmore4less · 21 October 2010 at 6:14PM

Who will be living in the house?

Transferring mortgage from parents to children

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