Can you remortgage a property on behalf of a parent?
Answered on 25 March 2018
I currently live with my partner in a property owned by my father. There is no mortgage on the property which is currently worth £180k. Can I then remortgage the property for £100k and give this money to my father? Is this legal? The property is not worth more than what it was when he purchased it 4 years ago.
Remortgaging a concessionary purchase
As the property is in your father's name there is no way that you can raise a mortgage on it, unless the title is transferred to you at the same time.
In this instance, you would be purchasing the property from your father and before you could arrange a mortgage a lender would want to know the true sale price for stamp duty purposes. This may well be considerably less than it's value and some lenders will want to restrict the amount they lend you based on the lower figures. Other lenders take the view that with a purchase at a concessionary price they can afford to base their calculations on the higher value. The latter will lead to a wider range of products for you to choose from.
I recommend that you speak to an independent mortgage broker who will be able to source the best mortgage for your situation and that your father seeks independent legal advice before agreeing to any sale.
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