Capital Raising on Mother's Main residence

Posted on 19 April 2012 by Lucy


I am a homeowner and have a mortgage of 125k and also on the deeds of my Mother's House, which is mortgage free. I would like to borrow money (remortgage?)on my Mother's House, which is mortgage free and worth £200k to the amount of £50,000 to pay off two unsecured loans that I have. Is this possible? Mother is 68 and I am 39. Thank you.

Lucy

So long as your income covers both debts it should be possible to arrange a mortgage on your Mother's house.  To assess this Lenders will either add the two debts together and apply an income multiple to your net annual income or they will deduct your existing mortgage payment as a commitment and ensure that your remaining monthly income meets their affordability calculations.

However, as the property is in your joint names any mortgage application will need to be in joint names too.  Your Mother's age may put off some lenders, but all of them will want to be sure that you are not exerting any undue influence on her and that she is not being coerced into a mortgage debt she does not want.  Others will not want to accept a mortgage application because you are not living in the property with her and there is a possibility that you will not make the mortgage repayments leaving them with no option but to make an elderly lady homeless with all the bad publicity that would generate.

Depending on the equity that you have in your own property I think you are much more likely to be able to capital raise on this.

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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