£50,000 Personal loan to help parents pay off mortgage

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Good Evening,

My parents have a house which they will give to me in the future (next 10 years in writing will). They have some savings and need another £50,000 to pay off fully the mortgage. I am willing to take out the £50,000 loan over 8-10 years as this will be my house in the future and it saves me a lot of money in the long run. The lender said they need to find £50,000 within 6 months where their mortgage term ends or they will be forced to sell the house which is not ideal as the area is really good and could easily double in the next 10-15 years.

Are there any banks that give personal loans without asking for the reason? Can you use it for other debt consolidation such as this case. My salary is around £35k.

How do you know they won’t need the value for care fees?

I'm not sure you'll get approved for that sort of loan on that salary? Depending on your other financial commitments too.

You're also not guaranteed the house if there's any care home fees or similar in the future.

As far as I’m aware you can’t get personal loans towards property. It’s why mortgages exist. Could they not just transfer it to you now and you pay the mortgage

Get legal advice. As posters have said the house may have to be sold for care costs. A loan of that size on your salary is s huge risk to you.

You could potentially borrow the money to buy £50k worth of the house and take security out. I doubt any bank is going to lend you £50k as a personal loan

Can you transfer mortgages to another person without incurring large fees e.g. stamp duty, inheritance tax etc..?

This is a terrible, terrible idea.

The scenario doesn't make any sense. Why wouldn't they be able to remortgage for the required amount?

Any personal loan you take out would be more expensive than the mortgage rate they'd be able to get.

Is this because they have an interest free mortgage? Dependent on the value of the property they may be better off doing equity release ( interest rates dependent)

Interest only

Please take legal advice. This may be seen as deprivation of assets if they need care in the future.

Could they remortgage and you give them the money each month? Doesn’t get round the care home etc issues but the monthly payments would be less

For lots of reasons, this is a terrible idea.

Tell them to go see a decent broker, who can advise them on their options properly.

You need proper financial and legal advice. There's loads of potential implications here to do with deprivation of assets, as well as potentially leaving yourself vulnerable with taking out a big loan.

You can’t be serious.

This is really messy. Definitely get legal advice on this

My friend was in this situation. She and husband ended up having to get mortgage and bought house off parents who now pay her rent to cover mortgage cost

Why can’t your parents take out a mortgage?

Have they explorer equity release? Or is it an option to sell and buy more suitable property.

I take it they have an interest-only mortgage. What was their original repayment vehicle? What's happened for them to end up at the end of the term without the money to repay?

Any lender will ask what you want the loan for. So many variables here, who knows how long your parents will be able to stay in the house, if their health should decline your parents may need a bungalow or assisted living apartment in future. With interest rates high and rising, can you afford a £50k loan assuming you could secure one? Do you have a mortgage now OP? Could your parents sell and downsize? Care fees are very expensive, so you may be making a big assumption that you will inherit the house. See a solicitor and financial advisor for advice, before you do anything at all. Your parent’s financial affairs are not your responsibility.

Yes interest only ending and they need to repay the whole thing within 6 months but one does not work and the other is a pensioner so they will not be able to get a £50k loan

You could get out a second charge mortgage perhaps

Do you own a home? Can you capital raise on that to buy a share?

The phrase "give to me in the future" is important here.

Until you own that property it's part of your parents estate.

That means it can be sold by the state to pay for care in the future.

If you fall out for any reason they can cut you from their will.

What you are proposing is ludicrous and no financial advisor would suggest you proceed.

If you want to enter into an arrangement that ties your and your parents money together then you need professional advice.

Both a financial advisor and a solicitor to deals with inheritance tax.