Can our sons remortgage our home?

Posted on 9 August 2012 by GRAHAM


WE ARE IN OUR 60S AND STILL HAVE A MORTGAGE WHICH IS INTEREST ONLY AND FINNISHES SHORTLY.WE CAN NO LONGER OBTAIN A MORTGAGE OURSELVES AS WE ARE UNABLE TO WORK.CAN OUR TWO SONS TAKE OVER THE MORTGAGE WITH A NEW PROVIDER AND ALLOW US AS PARENTS TO CONTINUE TO LIVE IN THE HOUSE?

Graham

This is a problem for people who are relying on selling their property to repay an interest only mortgage, when it finally comes to it you don't want to move or can't move because property values have fallen.

Whilst it may be possible to transfer the property to your sons they will have trouble finding a lender who is willing to let you stay on living in the property.  This is because you have built up rights of occupation, which if not terminated properly may prevent the lender selling and recouping their losses if they ever had to repossess the property.  The alternative for your sons would be to raise the money on any existing property they own and to repay your mortgage with that.

I think that you should talk to a reputable independent mortgage broker, such as ourselves, about the possibility of getting an equity release mortgage.  The amount that can be released will depend on your ages and how much the property is worth, not on any earned or pension income and may be sufficient to repay your existing mortgage.  An equity release mortgage is different to a normal mortgage in that you do not make monthly repayments and instead the interest is rolled up and only repaid on the sale of your property, either on death or if you move into permanent care.  This means that the amount of your estate can be considerably reduced and you should not proceed without taking independent legal advice and then discussing the implications with your family.

I believe we can help you 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 you find the right mortgage for your situation.

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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