Purchase of Parent's House

Posted on 30 July 2012 by William


My parents need to release some funds from their house and willing to sell the house to me for under valuation to provide them witha cash lump sum. I would the like to use the remaing equity as security for a mortgage for a dwelling house. Parents not on any means tested benefits. Any advice on lenders willing to consider options?

William

Lenders are very wary of these types of transactions, especially if your parents are going to be staying in the property.  Firstly by transferring the property into your name and releasing equity there is no guarantee that your parents will benefit and secondly it is very easy for your parents to establish rights of occupation pre-dating the mortgage which would mean the lender could not sell with vacant possession should they repossess the property.

Both Santander and Barclays will definitely not consider a mortgage application in these circumstances, but depending on the overall picture there are others who may.  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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