Buying for a dependent relative

Posted on 16 May 2008

My mother had a fall recently and after several weeks in hospital she is now staying with me as I live in a bungalow. We are very overcrowded so it is not an ideal situation. Her house is on the market for 89950 which is a realistic price. There have been about 5 viewings in as many weeks but no offers. She has seen a flat that she really likes close to me and my brother which is priced at 97950. My question is, can we help in any way to get the flat until the house sells ?

 

Is it better to remortgage her house (she will put it into our names if necessary) or get a remortgage on one of our houses?

 

Mine is valued at 225000 with 80000 mortgage and my brother's around 400000 with small mortgage. There is no mortgage on her house but we are not too keen on letting it out if we can avoid it. Can you help?

 

Hi Lesley,

Remortgaging her house into your names counts as a sale as it would require that the property deed is also put into your names. Your mother could only carry out a remortgage if she is under the age of 65 realistically, and in full time employment.  An equity release plan, which is more aimed at this age group, could also be difficult due to onerous terms and conditions if you sell the property, which it sounds like she is likely to do.

 

The idea of using your own equity to help is probably the easiest. Your brother and you both have equity in your properties, and could raise £50,000 each as Further Advances, for example.

Alternatively, you could both combine forces and buy the place with its own mortgage, as a second home, based on your spare incomes. Your mother could then repay you, when hers sells, although with this option the property would be in your names, though this may be of help further in the future in respect of inheritance.

 

I hope your mother recovers soon, best wishes.

 

Category: Mortgages in retirement, Raising capital out of property, Special circumstances

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