Posted on 13 January 2013 by Mrs T
Where can my son get a mortgage to buy a share of our house? We would use that money to move into a smaller property and then just be on the deeds as joint owners with our son of the original property. The idea being to help our son and his family obtain a large enough house for their family and for us to downsize.
As I understand it, you are loking to come off the mortgage but still stay on the title deeds, which if this is the case won't be acceptable to a lender. The simple reason for this is that if you are not a party to the mortgage, but are on the title deeds, then in the event that the mortgage was defaulted on, the lender would be unable to gain possession of the property.
Your main options are to apply for a 'Transfer of Equity', where you are adding your son to the mortgage and deeds, and staying on yourselves. You can either approach your existing lender for permission or can look to remortgage to a new lender. The lender will look at the overall affordability of the loan and will take into consideration the level of income your son earns, as well as your current income and future plans too.
As part of the transfer you would need to take legal advice as to whether you should get the ownership of property as 'tenants in common' with a defined split between you and your son to be determined.
The other option would be to "sell" the property to your son, and retain a legal interest in the property. This would be a 'concessionary sale' and not every lender will look at this type of scenario, however as John Charcol is an independent, whole of market broker, we have excellent relationships with those lenders who should be able to help. Once again you would need to take legal advice on the best way to do arrange the protection of your retained share.
I think it would be worthwhile to discuss your enquiry in more detail, and if you would like to do so, then please submit an enquiry and we'll arrange for you to speak to one of our consultants.
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.