Taking over a mortgage: a simple sign?

Answered on 14 August 2017

My Mother & Father are going through a divorce. Due to the poor housing market they have been unable to sell. They have a mortgage of £285,000 and the house is worth £380,000.  My long term partner, my sister, her long term partner and I have offered to take over the mortgage, do the house up, sell in a few years and we shall keep all the profit.  My parents would get their £95,000.  Does this sound like an idea that could work?  Can the mortgage simply be signed over to us?

I think this will depend on who is going to live in the property. 

Parents living in the property

If either of your parents are going to stay in residence then I do not think you will be able to transfer to your names or find a new lender willing to grant a mortgage. This is because your parent would have a prior right to reside and the lender would not be able to get vacant possession if they had to repossess the property.

Not living in the property

If your parents are not going to live in the property then it depends on what your intentions are? If, for example, you intend to let it out then it may be possible to get a buy-to-let mortgage in four names based on the anticipated rental income. The property would have to be in good condition and the rent would need to cover the monthly mortgage payments plus an extra 25-30%.

You will need to take independent legal advice to protect both yours and your parents interests and I recommend that you speak to one of our mortgage advisers. Please call 0330 433 2927 and they will then be able to give you specific advice you on your situation.

Ask The Mortgage Experts answers 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.