Capital Raising for a Deposit

Posted on 10 April 2012 by Mr P

I am on the deeds of a mortgage free house with my parents, I would like to remortgage the property (with the consent of my parents) to raise a deposit for another house. However, I want to do this on my name and not involve my parents (again with their consent). Is this possible? My overall aim will be to repay the remortgage on the current home and then get another mortgage with my wife on the second home, again can you advise if this is possible?

Mr P

You will not be able to raise a deposit using your existing property as security without including your parents in the contract.  Any mortgage or secured loan will have to be in the same names as the title deeds and your parents will be just as liable for the mortgage repayments and debt as you are.

I recommend that you seek independent legal advice to see if there is any way that you can indemnify your parents should you all go ahead and remortgage the current property.

With regards to obtaining a mortgage with your wife on a second property, this should be possible as it will be your main residence and the current property will be occupied by your parents.  Lenders will want to see that you have sufficient income to cover both mortgage debts unless you have sufficient savings to repay the capital raising remortgage.

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.


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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