Home for a Family Member

Posted on 21 March 2011 by Fiona

Can I buy a second property and retain my flat?

I have a flat in London worth £300,000 with a mortgage on it of £30,000. I have £30,000 in savings and could pay off this mortgate. My annual income is £30,000. I have seen a house I would like to buy priced at £285,000 as a home for my mother. I have a deposit of £35,000 available to put down, leaving £250,000 to raise on a mortgage. Could I: a. use the flat (with mortgage paid off) as guarantee to buy the house for my mother and/or b. raise a £250,000 mortgage another way to buy the house for my mother?


Unless your mother has a similar income to you I cannot think of a way to raise £250,000 based on your income of £30,000. Whilst you existing flat could be used as security for part of the amount, Lenders still need to be able to be sure you can afford the monthly repayments on the whole debt.

If your mother does have a substantial income then it may be possible for you to buy the property jointly or to buy the property in your mother's name. This would mean your mother could raise a mortgage on the property and you could raise the balance on your own home. You would need to take legal advice about how to protect your investment so that you do not lose out in the future.


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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