The situation is that there is an interest only lifetime mortgage on the property, for approximately 50% of the property value.
Adult children want to move back in, and some extension will be made to the property lay out to give everyone their own space - the house is not being split into two properties but there will be two kitchens, two sitting rooms, etc. There are already two wings and two bathrooms so no major structural changes.
The mortgage states that if any adults live at the property, the mortgage company has to know. The mortgage is currently only in the name of the parents, not the adult children, and there is no desire to put the adult children on the mortgage, as the mortgage is aimed at retirees, not people in full-time work.
I presume that the mortgage company doesn't want to be left with a property they can't sell (i.e. adult children are sitting tenants), if something should happen to the retired parents before the mortgage is paid off. (capital is currently being paid down and should be paid off in about 9 years).
Has anyone come across this situation and how did you get around it? I am sure that the situation of adult children moving back in with their parents is not unusual, especially given the number of divorces and property prices/saving for deposits etc.