Buying with parents

Posted on 23 June 2011 by Sian Hughes-Jones


I'm in the process of selling my flat and should have around £15,000 to add to a deposit when I'm buying a new home. The only problem is that I work part-time so am worried I will not be able to get much of a mortgage. Can I get a mortgage with my retired parents or will they not be able to get a mortgage because they have no income except for a pension?

Sian

The usual reason for buying with your parents is to boost the amount you can borrow by utilising their income.  If your parents are retired and relying on the state pension then this is unlikely to materially effect the amount you can borrow.  You will also find that Lenders will want to restrict the term so that the mortgage finishes by their 75th birthday.  This will make the monthly repayments considerably higher and may even reduce the amount you can borrow to below what you can get on your own.

Your best bet is to visit the websites of the national lenders and use the affordability calculators to see how much you can borrow on your own.  Depending on your circumstances, it might be possible to get slightly more than this with your local building society, especially if you can demonstrate a history of making mortgage payments and other regular outgoings which add up to the amount of the new proposed mortgage payments.

Peter

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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