How can I help my parents?

Posted on 28 March 2012 by Stuart


My parents have a house valued at around £90000 with £11000 left to pay, however my Father has become ill and may not be able to return to the job he does and may have to take on a lesser role with a lot less pay. Would it be possible for me to take out a Mortgage for the house or to take out a loan, on the remaining balance.

Stuart

As long as you are in recent of regular earnings, either as an employee or self employed and have a clean credit history there are quite a few options open to you.

With a debt of £11,000 the easiest way would be to take an unsecured loan for the full amount and pay your parents mortgage off.  This will not be the cheapest way and along with putting the debt on a credit card should only be considered as a last resort.  If you own your own home you should be able to increase any mortgage you have by taking a further advance with your existing lender and this will normally only involve an administration fee and perhaps a revaluation fee, the alternative to this would be to remortgage to a new lender who would normally meet both the valuation fee and legal fees for you.  The fees and interest rates will be far cheaper than with an unsecured debt, but you will be putting your own home at risk if you do not keep up repayments.

I think the easiest option for you is to just make the monthly repayments on your parents behalf, the lender will not mind so long as their mortgage is being paid.  You could, with your parent's consent get their property and mortgage transferred into either your 3 names or your sole name, but this will involve solicitors fees and you would need to get consent from their existing lender who would also make an administration fee.

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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