Buying a share in a house my parents already own.

[NutritiousAndDelicious]

I currently live in a house owned by my parents, I would like to buy into it.

We've done the sums and £70k would be easily affordable for me and would buy me a quarter of the house iykwim. I'm currently paying them rent of £570 a month.

£70k is less than twice my salary, so would the bank be ok with this? Would I need a 10% deposit, so £7k? Would I pay stamp duty? What would the process be?

I just want to know a few things before walking into my bank!

TIA

Would you be paying rent on the remaining share of the property? Along with paying your mortgage?

No I'd only be paying the mortgage, they are doing me a massive favour!

Bump

I'm not even sure the bank will agree to a mortgage on those terms. Because your parents will still own three quarters of the house and what if you default on the mortgage. Only saying this because that will be from their point of view. I think you will need to get some advice from a solicitor on how best to proceed.

I'm a solicitor-this is called a transfer of equity. If your parents already have a Mortgage you will need the bank to add you onto it(and release a further advance). If there is no mortgage, the 3 of you will need to take one out (the names on the deeds and the names on the mortgage must match for land registry purposes).

Thank you, there is no mortgage on it. But they have a small mortgage left on there own house.

The only way for you to take out a mortgage is for all of you to go on the mortgage. You cannot take out a mortgage on a share of a property I'm afraid.

Banks will only grant a mortgage if there is a way to guarantee that they get all their money back if you default on the loan. Since they would not be able to repossess and sell a quarter of a house, it is very unlikely you'd get a mortgage in the first place.

If you parents own the property outright, why don't you buy it directly from them? Negotiate a rate of interest that is acceptable to you both, then work out how long you want to pay it back over. You can use a mortgage calculator to work out the repayments.

Is the property to be spilt four ways when your parents die? Just trying to understand why you only want to buy a quarter.

Great thread, I'm in similar situation, just wondering too what outcome was for you.. dad passed over 4 years ago, living with Mum, need to sell but then wondered myself if could part buy the house to help mum, we have talked about it. Going by this thread see we both would have to be on mortgage, Mum is retired and I'm obviously working. Most I could get is 80k, house worth around 500k. I'd pay off the mortgage anyway and I'd assume I'd be on deeds? So when Mum does eventually sell I'd get that stake percentage of property?

House is mortgage free..