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Can we raise a mortgage on a property in my mum's name, so that we can purchase a Buy To Let?

Posted on 3 June 2013 by Irfan


Myself and my wife currently live with my mother in a property that is mortgage free, valued around £320k. This property is in my mothers name. We want to raise money against this property in order to buy another property in mine and my wifes name which we will rent out. The idea being that we use rental income from the new property to cover the mortgage on my mothers existing property and we gain an asset. Is this a good idea and how feasible is it?

Irfan,

Purchasing an investment property is perfectly feasible and for many people a very good idea. However in your current circumstances as your mother owns the property in her sole name, you wouldn't be able to raise a mortgage in your names. You would either raise the mortgage in your mother's name, subject to her being able to meet the lenders affordability, or she could do a 'transfer of equity' which would entail adding both yourself and your wife onto the title deeds and raising a mortgage on the property in all three names. You would would be able to purchase the investment property in both yours & your wife's name. Also as the funds raised wouldn't have been for the direct benefit of your mother, as she isn't to be a party to the new property, she would have to take independent legal advice as part of the process.

If you'd like to discuss this matter in more detail, then please let me know and I'll arrange a convenient time for you to talk to one of our consultants.

Regards,

 

Simon

simon.collins@johncharcol.co.uk

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