Financing your first home
Joint mortgages with your parents
These may sound rather strange but they might provide the answer you're looking for.
It is now possible to take out a full joint mortgage with a parent or other close family member. This enables a first-time buyer to use a parent's income to enhance their borrowing capacity without their parent having to consider equity release or selling investments.
Whoever has agreed to meet the monthly mortgage repayments, with any joint mortgage both parties are jointly and separately liable for the entire loan.
Bear in mind that both names will have to feature on the mortgage agreement and therefore the property deeds. This means that if your parent is intending to sell their share of the property to you when your earning capacity allows you to take it on, assuming the property is not their principle residence, they could be liable to a Capital Gains Tax charge.
It is crucial that you take independent financial advice on all aspects of this kind of mortgage, including tax and legal issues.
To contact our tax specialist, click here .
To contact our lawyer, click here .
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