Partial Mortgage on Parents House - possible??

[crostonian]

Going to speak to my existing mortgage lender next week but wondered if anyone in the know had any suggestions.

Current situation is I have 50/50 interest only/repayment mortgage on the house I live in, approx 65% of the properties value is mortgaged.

I'm looking to move out and live in my parents house and then rent out my existing property. The rent would be approx £400 more than my current mortgage so I'd be looking to change to a 100% repayment mortgage.

Now where it gets complicated is that I'd like to mortgage a portion of the value of my parents house. It's worth around £600K and they have about £25k owing on it. My ideal would be to take out a mortgage against their property for around £150k, giving them £100k and giving me £50k to carry out work on the property to adapt it to my needs.

The discussion about whether I should or shouldn't be moving back to the parental home is irrelevant, what I'm wondering is will my plan be laughed out straight away or is it doable. I realise there are loads of determining factors which could swing it either way but in essence is it something that could be done?

[MajorProblem]

A BTL mortgage would replace the one one your current property then you would need your parents to sell you the house I would imagine in order to get a mortgage there.

[crostonian]

Yes was thinking this as I would have to be on the deeds of their house, would it be possible to have shared ownership?

[MajorProblem]

I'd imagine it easier if you were partners on the same mortgage so get a mortgage between you to clear all existing debt on the house should be ok as long as your are on the deeds.

[crostonian]

The reason for wanting to get a mortgage for around £150k on their house was to give them some capital as this is an alternative to them downsizing.

[Crafty_]

If they don't urgently need the 100k, why don't you pay them directly, you don't pay interest, they get some income.

[crostonian]

Crafty_ said:

If they don't urgently need the 100k, why don't you pay them directly, you don't pay interest, they get some income.

Yes that could be worth discussing as they don't need a lump sum as much more a better income.

[Sarnie]

crostonian said:

Going to speak to my existing mortgage lender next week but wondered if anyone in the know had any suggestions.

Current situation is I have 50/50 interest only/repayment mortgage on the house I live in, approx 65% of the properties value is mortgaged.

I'm looking to move out and live in my parents house and then rent out my existing property. The rent would be approx £400 more than my current mortgage so I'd be looking to change to a 100% repayment mortgage.

Now where it gets complicated is that I'd like to mortgage a portion of the value of my parents house. It's worth around £600K and they have about £25k owing on it. My ideal would be to take out a mortgage against their property for around £150k, giving them £100k and giving me £50k to carry out work on the property to adapt it to my needs.

The discussion about whether I should or shouldn't be moving back to the parental home is irrelevant, what I'm wondering is will my plan be laughed out straight away or is it doable. I realise there are loads of determining factors which could swing it either way but in essence is it something that could be done?

It can't be done the way you are suggesting. You can't secure a mortgage against a property that you don't 100% own.

You could all be on the mortgage and deeds, but your parents would need to still be able to satisfy the maximum age criteria Eg if the maximum age at the end of the term is 70 and they are 60 now, thats going to result in a maximum term of 10 years.

I currently have a mortgage in process where a daughter lives with her Mother who owns the property. The Mother is selling the property to the daughter and gifting her the quity as the deposit and the daughters mortgage will redeem the Mothers remaining mortgage. You could do it this way but you have to beware that a lot of lenders will not accept the parents remaining in the property after completion particulary as there will never be vacant possession....

[crostonian]

That's interesting, was thinking the answer would be something along these lines, will see what my existing lenders have to say anyway but thanks for the advice.