Posted on 3 December 2011 by Tamsin
I live with my mother, and my grown up son in a house worth approx 600k. My mum would like to downsize, and move into a local private retirement flat. The easiest solution we though was that I get a mortgage to buy the flat, which is about 200k. I have had a mortgage agreed for more than this before, and earn 52k so this should have been ok. She could move in slowly, and it would give us a bit of breathing space to sell the house. Once the house is sold, the mortgage could be paid off, and we use some of the funds to buy somewhere for me and my so to live. We are trying to avoid equity release as we only need a shortish term loan, and desperately cannot afford to erode away the equity in the house top much, as two properties need to be bought. Unfortunately, my bank said no, because the property is designed for over 60s. They had no problem with me buying it for her, as her only income is state pension. Do you think I would be able to get a mortgage to do this, or is there another solution?
These retirement developments normally come with a legal restriction stating that they can only be owned and occupied by people over 60. Usually the names on the property title have to match the names on the mortgage, which is probably why your bank have said they can't lend to you.
I can think of a couple of ways around this and although I would have expected your bank to suggest them, it would be worth asking just in case:
• Will they allow you to act as guarantor for a mortgage in your mother's name?
• Will they allow a mortgage in your joint names with the title just registered in your mother's name?
If your bank is unable to help you, I believe we can 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 advise you on your situation.
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.