Mortgage - Joint with parents?

[schmunk]

Hello All

I'm considering buying a house with my parents (don't laugh). Rough figures:

They will initially buy the house alone - ca. £1M, with a £200k mortgage.

We want to spent ca. £500k on extending to roughly double in size and create effectively two separate wings (so we could move in and have privacy!). To do this we would add £150k in equity and £350k of mortgage.

Being relatively elderly, my parents can only have a mortgage for the next 8 years, but would pay off their £200k in that time. I cannot currently borrow more than the £350k, or pay more than the repayments on that amount.

Any ideas on how we could structure this to allow both parts of the proposed mortgage to exist now as a first charge at relatively low rates? Could we jointly borrow £550k, for 8 years, with interest only on ca. £350k (so that we don't have to pay off our £350k at an accelerated rate)? Has anyone done anything similar?

[Ozzie Osmond]

schmunk said:

Any ideas on how we could structure this

£1,500,000 to spend.

Perhaps get yourselves an accountant and a solicitor?

[schmunk]

Thanks for the suggestion, but how would either of those help with my mortgage query?

[trickywoo]

schmunk said:

Thanks for the suggestion, but how would either of those help with my mortgage query?

You need to be careful how its structured for any future stamp duty / inheritance tax etc.

Its can be complex and the chances of getting all the advice you need from PH is slim.

It'll pay you back and some to do it properly first time.

[J012E]

The short answer is yes it could most likely work, however, as previously said you need to be aware of inheritance tax as ownership laws as this could massively affect you in the future.

Have PM'd if you want more info

[schmunk]

Thank you both for the replies - it looks like it's a goer; just need to see whether our offer's accepted now.