buying a home for a dependent relative

Answered on 20 April 2016 by Nick Morrey

My mother is retired and has sold her flat in the North. She is living with me near London but she would like to buy a place of her own again in the South East.  She has £80k saved from the sale but even small flats are at least £100k. I have a joint mortgage of £1150 a month and salary of £35k.  I would like to get a mortgage for dependent relative to cover the difference from her £75k deposit and £105k property. Are there any lenders in the current market who would offer me a £30k mortgage without punitive rates?

There are lenders around who will consider mortgages for buying a home for a dependent relative and these are usually at standard residential rates. They will want to be sure that you can afford both debts and this might be where you run up against problems. Although your current mortgage is held in joint names you have an individual responsibility to make sure the payments are made and so you will find lenders use the whole debt in their calculations.

The other factor in raising a mortgage on your mother's property is that you would have to be named on the title and the property purchased either in your name or joint names with your mother. You should take legal advice on the best way to do this before applying for a mortgage as it will determine whose names will have to go on the application.

Perhaps the easiest way to raise the funds is by approaching your existing lender for a further advance. This would be secured on your property and assessed against your joint incomes so it will depend on whether your partner is willing to take on the extra debt and if there is enough equity in the property to make it feasible.

If your lender is unwilling or unable to help, I believe you would benefit from speaking to one of our independent mortgage advisers. Please call on 0344 346 3672 and we will be able to look at your situation and advise you accordingly.

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.


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