I would like to buy my first house- please help - not sure about whether to take out mortgage ourselves or see if mother can help?

[Cristiane]

Hello,

I wonder if anyone could give me advice.

I have started work again after children and earn pre tax £71,500. I have never bought a house before, weird set of circumstances, but that's the way it is and i just haven't.

My husband has become a stay at home dad after being made redundant. He is an architect.

We have our eye on a property worth about £325,000. It needs a lot of work (costing about £70,000, which would add a lot more in value after renovating, similar, renovated properties are selling for between 45ok and 500k in the area).

As my husband is an architect he would project manage the work and hopefully deliver something very high spec.

I can ask family for help with the deposit. However, my mother has indicated she might help in terms of being able to take out a mortgage secured against her (mortgage free) house. Does this come at a much better interest rate? What are the pitfalls?

I am not sure what to do. It is a big deal and maybe too big a commitment to start off with

Yes that's a good point but i would really just like to know if we would get a better rate doing it this way with a remortrgage, there are a lot of reasons behind why she would remortgage.

Someone can correct me if I'm wrong, but I'm not sure you can take out a mortgage secured on property #1 to pay for property #2. However, your mother could stand as guarantor on your new mortgage and that might help you get the amount you require. Mortgages get cheaper the bigger the depost you have. The basic deals start at 10% deposit and, if you can put down 40%, those are about the best deals going.

Chil1234, I think you are wrong! My parents remortgaged their mortgage free home in order to buy a flat outright (it was cheaper doing it that way round for some reason?).

Your mother could be a guarantor depending on her income & age. Nobody will take a guarantor over the age of 70 - in fact nobody will give a mortgage to anyone over the age of 70!

We were looking at getting a mortgage guaranteed by my parents, but have ended up getting a joint mortgage with my dad as we can get better rates that way round.

As a layman, I wonder if this offer is made for tax evoidance (nb: not evasion) reasons, ie to minimize the value of your mother's estate.