Giving a relative a mortgage

[oldbanger]

We're going to be helping my niece buy a flat - she's inherited some money and can cover more than half of the cost but her employment history means she is going to struggle to get a mortgage even though she can afford to pay one. We've offered to make up the shortfall. This is definitely not a gift and we don't want to co-own the property.

I know we can just register a charge for the amount, but I'd prefer to actually draw up a mortgage deed. I'm currently looking for a solicitor and, as this isn't really a standard thing, I wondered if anyone has any advice of what to look for please.

[C70R]

oldbanger said:

We're going to be helping my niece buy a flat - she's inherited some money and can cover more than half of the cost but her employment history means she is going to struggle to get a mortgage even though she can afford to pay one. We've offered to make up the shortfall. This is definitely not a gift and we don't want to co-own the property.

I know we can just register a charge for the amount, but I'd prefer to actually draw up a mortgage deed. I'm currently looking for a solicitor and, as this isn't really a standard thing, I wondered if anyone has any advice of what to look for please.

Can't you just try one of those 'family start' mortgages for first-time buyers? Barclays had a very good product from memory, and it would even allow you to retain ownership of the deposit and decide what you want to do with it in 5yrs' time.

[oldbanger]

They are only for people who aren't putting in a deposit and the max you can put in is 10%. My niece is going to put in around 50-55%

[C70R]

oldbanger said:

They are only for people who aren't putting in a deposit and the max you can put in is 10%. My niece is going to put in around 50-55%

Oh, I see! When you wrote "cost" I thought you were referring to the monthly payments.

I think you're still looking at a guarantor mortgage to do what you're looking for, but you'd need one that wasn't deliberately geared up for people gifting deposits. Specifically, a Joint Borrower Sole Proprietor (JBSP) mortgage is the product you're looking for. I have no idea about which lender is the best for your situation, so I'd find a few that offer the product and go talk to them about your situation.

[oldbanger]

We were thinking of lending her the difference out of our savings and getting a mortgage drawn up between us and her, rather than acting as her guarantors. Ultimately then it works out cheaper for her and we get an investment that's better than an ISA for a couple of years

Edited by oldbanger on Monday 25th April 12:29