Using Parental Home as Collateral For A Loan

Posted on 4 May 2012 by Mr Jacob


I have a property worth £130000 I owe £55000 on my mortgage.My mother who is 77 owns a property worth £200000 with no mortgage. I would like to borrow £80000 to invest in a property. Is it possible to acquire this money using my mother's house as collateral?

Mr Jacob

It is only possible to use a property that you own, on your own or in joint names, as security for a mortgage and so you would not be able able to use your Mother's property to raise a deposit.

Depending on whether you have brothers and/or sisters, your Mother may be willing to transfer the property into you joint names in which case the situation becomes at least a possibility, but you should both take independent legal advise before going down this avenue.

Peter

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