Can I take out a mortgage for my parents?

Posted on 4 August 2012 by Tracey


My parents need to find somewhere to live. Myself and my husband own our property so have no mortgage could we take out a mortgage for my parents?

Tracey

As long as you earn enough to afford the mortgage without any contribution from your parents and your credit record is clean there are a couple of options for you to consider.

Depending on how much it is worth you may be able to take a mortgage on your own home for the full purchase price of your parent's home or if there is a deposit of 25% available to put down on the new property you may be able to raise a 75% LTV mortgage on that.  Alternatively you may decide to take a mortgage on both properties so that you can qualify for the cheaper rates available on low loan to value (LTV) mortgages.

You will also need to consider whether the property is to be purchased in your parent's names or in yours?  There will be pros and cons to each and I recommend that you take independent legal advice, especially if there are other beneficiaries to your parents estate.  I have forwarded your enquiry to our in house solicitors, Rollingson's so that they can advise you on this.

I believe we can help you decide how to proceed and that you would benefit from speaking to one of our independent mortgage advisers.  Please call 0344 346 3672 and tell the consultant the date and title of your question, they will then be able to help find the right solution for you.

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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