Can we sell our home to our son if he has no deposit?

Posted on 2 October 2012 by Thomas


We are in our sixties with mortgage balance of 92000 plus credit card balances totalling 40000, we are still up to date with our payments and our house is valued at 160000 - 170000, but would sell to our Son for 135000, Our Son lives in Sydney and would buy our house then we could rent it back off him as we are struggling to keep up payments, but can he get a loan without deposit in the uk.

Thomas

If your son is resident in Australia he is going to find it very difficult to get a mortgage in the UK without returning home first.  This is because all banks need to have a particular licence to sell financial products to anyone resident in Australia and only a few UK lenders have this.

In the usual course of events where you are selling to a family member and moving out there are a few lenders who will consider 100% mortgages so long as the amount of the loan is no more than the open market value of the property.  However, if you are staying in the property then it is going to be very difficult if not impossible for your son to get a mortgage.  This is because as existing occupiers you could have a prior claim to the property which meant that the lender could not get vacant possession if the need arose.

Reading between the lines, I think you would do well to speak to your local Citizens Advice Bureau or the Consumer Credit Counselling Service before making any decisions about selling your home.  They will be able to help you budget and prioritise your payments so that you can remain in your home.

Peter

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