Buying a property on your own can be hard. Many first-time buyers opt to purchase their house with the help of their parents, by going down the route of shared ownership, but what are the implications of doing this?
Shared ownership with parents will definitely make it easier to get a mortgage and borrow a larger sum from lenders, however this would mean that being named on the title deed, your parents would also need to be a party to the mortgage.
If your parents default on paying the mortgage, then you can be made liable to pay the whole mortgage and vice versa.
Well, this depends on the age of your parents. Many lenders do not like to lend for a term longer than the borrower’s 65th or 70th Birthday. Therefore, although it may be easier to get a joint mortgage with your parents if they are still working, the term of your mortgage may be shorter if your parents are in their 40’s or above.
There may not be tax implications for yourself but if this is your parents’ second home, then they may need to pay Capital Gains Tax on the profit that is made when the house is sold.
If you would like to talk to me about shared ownership in more detail please do not hesitate to get in touch!Talk to our legal team
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