Taking over the remainders of parents mortgage

[katie_78]

Hi

To help me get a foot on the property ladder, my parents have recently suggested that I consider taking over the remainder of their mortgage (which is an amount I could borrow) but would need to extend the repayment length. The amount I would pay would mean I would own a third of the property. They have another property which they would live in and I'd live in the property I part-own. This would leave my parents mortgage free and me on the property ladder.

Is this do-able and what would the implcations be?

Thank you

[buildersmate]

The amount you'd have paid for it means you paid for a third ot it, not own a third of it. You own a third of it by having your your name on the Land Registry document.

Your parents would be liable for capital gains tax on the increase in capital value for their two-thirds stake, when the property is eventually sold (because it is not their main residence).
On death, your parents Executors would still be faced with the inclusion of the two-thirds stake as part of the estate value for Inheritance Tax purposes.

[katie_78]

Thank you for your response. In parents, I meant my mother and her partner. The property which has been suggested for me to pay off the mortgage for is my mother's only property, which is solely hers. The other property is her partner's only property, which is solely his. Does this make a difference or have any implications? Thanks

[EverClean]

You need to seek financial and legal advice. You will have difficulty in having a lender give you a mortgage on a third of a property. There are huge legal and inheritence issues to be overcome. If your mother and her partner do not marry or get this covered legally then there may be issues when he dies as his share of the property will pass to his next of kin - which in all probability won't be your mother. You would then own a 3rd share with your mother and perhaps his brother/sister/son/daughter. It is a complex business and I suggest that you take professional advice to ensure that this doesn't end up really messy.

[katie_78]

thank you. my mother and I are arranging to go and see someone, just wanted some advice so had an idea what to expect. thanks again

[buildersmate]

Whilst I agree with Everclean's assessment in much of what he says, I don't agree on the mortgage bit.
You should have no great difficulty getting a mortgage on a one-third stake of the equity. That's precisely what these shared equity schemes for 1st Time Buyers are doing right now.