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Stuart J
Stuart J, Solicitor
Category: UK Property Law
Satisfied Customers: 19530
Experience:  PGD Law. 20 years legal profession, 6 as partner in High Street practice
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My retired parents have a interest only mortgage which is coming to term soon but don'

Resolved Question:

My retired parents have a interest only mortgage which is coming to term soon but don't have the money to pay the balance.

Myself and brother want to get a mortgage to pay off this balance to allow them to have security through their old age. In effect buy the property for well below the market value

Is their any reason in the uk that we cannot do this. And how do we go about it
Submitted: 8 months ago.
Category: UK Property Law
Expert:  Stuart J replied 8 months ago.
Thank you for your question here on Just answer. It is my pleasure to try and assist you with this today. Please bear with me if I need to ask for any further information from you in order for me to be able to advise you fully. My name isXXXXX and I am a practising solicitor. I have been an expert on this website in UK law since 2008. During that time, as you appreciate, I have answered thousands of questions from satisfied users on a variety of subjects.
Because we are all in practice with clients and court and other users, I might not always respond in minutes, particularly evenings and weekends. Please bear with me in that case. I will be online and off-line all day most weekdays and weekends.

Do you intend to put the mortgage in joint names?
Customer: replied 8 months ago.
Not necessarily. My brother has a better credit score than I do so it may be better if he gets the mortgage in his own name. But joint is still an option
Expert:  Stuart J replied 8 months ago.




Thank you. There is
no legal reason why you cannot do this. However, the lender will want
confirmation as to why you're buying the property from your parents, well below
the market value.

Not all lenders
will consider seller gifted deposits so you may need to shop around to find
someone who will lend on it on this basis, and therefore you may be better
seeing it, an independent mortgage broker who can investigate the situation
with several mortgage companies rather than just you walking up and down the
high Street lenders and banks.



The other potential
issue is that if ever your parents need to go into care, and the care has to be
paid for, the local authority will look to you to pay for the care and if
necessary you will have to sell the house if you do not have the money to pay
it.



Many people think
that transferring the property into children's name will means that it escapes
liability for care fees. It does not. If the reason for the transfer is to
avoid those care fees.



The only way of
guaranteeing it escapes care fee payment is for you to buy it at full market
value, but then your parents would have cash obviously. You don't mention care
fees, so I assume that was not a consideration but I mention purely for
completeness.

Stuart J, Solicitor
Category: UK Property Law
Satisfied Customers: 19530
Experience: PGD Law. 20 years legal profession, 6 as partner in High Street practice
Stuart J and 5 other UK Property Law Specialists are ready to help you

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