Posted on 11 February 2010 by EUNICE HINDS
I OWN MY HOME, VALUED APPROX £400,000, OUTRIGHT. MY DAUGHTER & son in law are anxious to buy a house and have about £200 deposit. my son inlaw earns approx £55,000 A year. they own a flat each, currently both let, and covering the outgoings (including mortgage) with about a 10% profit.They wish to keep these flats.
Is there a way to use the equity in my house to help them? What is the maximum mortgage they could obtain? Could I obtain a mortgage on my property (I am 65 with a pension income of £25,000pa)
On the face of it this seems a simple transaction, but the reality is very different, the remortgage of the property will coincide with a change in ownership from your parents joint names to your mothers sole name. Lender's remortgage incentives usually include 'free legals' if you use their nominated solicitors, but this will not cover the additional costs involved with the transfer of title and you may well be better off using your own solicitors and looking at products that offer a cashback instead.
Whether lenders will consider you as a guarantor for your mother will depend on your individual circumstances and is perhaps the opposite situation that lenders normally consider. Usually a parent will act as guarantor for their son or daughter and it is viewed as a short term arrangement until the sibling is able to fully support the mortgage on their own. In your circumstances it is not likely that your mother will be in this position in the foreseeable future and a lender may wish to put the mortgage in your joint names.
I recommend that you speak to an Independent Financial Adviser about your situation.
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