Posted on 3 March 2013 by Marlen
My mother (aged 68) owes £170k on an equity release mortgage on a property worth £550k. Myself, brother and sister want to take out an interest free mortgage of £200k to pay off the debt and enable her to live there for 3-4 more years. Plan being to then sell the house and pay off the mortgage. What are the options available to us to do this?
Basically what you are looking to do is a "Concessional Family Purchase", whereby you, your brother and your sister would buy the property from your mother at a reduced value (£200,000) and she carries on living in the property. This is not a standard enquiry and unfortunately, not every lender is happy with this type of case, however there are still a number in the market who will look at these.
The lending decision will be based upon the personal financial situations of yourself, your brother and your sister, and you will need to meet the lenders standard affordability assessment and lending criteria. Although you would be able to apply for the loan on an interest only basis, you should be aware that lenders assess affordability on a repayment basis.
If you'd like to talk your enquiry through in a bit more detail, then please let me know and I'll arrange a convenient time for you to speak to one of our consultants.
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