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Joshua, Lawyer
Category: Property Law
Satisfied Customers: 29201
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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We are looking to purchase a house with our parents who have

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Hello, We are looking to purchase a house with our parents who have £250k that they want to invest in the property for a share in the property. Our mortgage lender has advised that they will not mortgage us as my parents are to old and they are therefore not permitted to have any interest in the property. We can mortgage the property ourselves without their investment. But they are looking to invest the money for a share in the property to secure their future. Is there a way they could legally do this without incurring any penalties?
JA: Where are you? It matters because laws vary by location.
Customer: Uk
JA: What steps have you taken so far?
Customer: Conveyancing solicitor
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: No

I've been working hard to find a Professional to assist you with your question, but sometimes finding the right Professional can take a little longer than expected.

I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.

Thank you!
Customer: replied 12 days ago.
I am happy to wait a bit longer.

Hello and thank you for your question. My name is ***** ***** I will be very pleased to assist you. I'm a practising lawyer in England with over 15 years’ experience. Please be aware that although I will endeavour to reply to you promptly, I am also in full time private practice and so I may not be available to respond immediately and it may also take me a few minutes to prepare a reply. The site will notify you as soon as I respond. I look forward to working with you to answer your question fully.

  1. May I confirm if your parents are also seeking to live at the property with you all this simply be an investment please?
  2. if just an investment, with a also require any rent or other content to allow you to live in the property rent free in respect of their share?
Customer: replied 12 days ago.
Hi Joshua, my parents will be living in the property with us.

Thank you. because a mortgage is involved, there is no option other than your parents to make an absolute gift of the monies in question to you because the lender will not accept anything else. This decision will be presented to you by the lender as a take it or leave it option and therefore the only option available to your parents other than the making of an absolute gift will be not to proceed.

However, once the transaction has been completed, it is open to you and your parents to retain a different solicitor that that acted in the mortgage ( the reason for this is the original solicitor would be under a duty to report any developments to the lender) to prepare a declaration of trust. This is a legal document setting out that whilst you will remain the legal owner of the property which will be a requirement of the lender, the equity is split as between you and your parents in defined shares.

This will require an element of trust on the part of your parents because it would be open to you to simply decline to enter into a declaration of trust after completing the transaction because a gift is a gift ( which is above will be a requirement of the mortgage lender). If your parents are willing to trust that you will honour the terms of the above in good faith then the above is the way families will typically get around lender's requirements in this respect. If your parents are not willing to trust that you will do as above, then they will need to consider an alternative investment which does not involve the mortgage

Customer: replied 12 days ago.
Thank you, ***** ***** would an arrangement like that cost an independent solicitor to undertake?

typically costs in respect of the above arrangement would be in the order of between £400 and £650 plus VAT. If you require any assistance with the drawing such a deed up post completion you are welcome to revert to me as an alternative

Customer: replied 12 days ago.
I would very much welcome that thank you. How do i contact you?

You are welcome to return to this thread which will remain available from your account or a link in your email in the first instance

Customer: replied 12 days ago.
Thank you very much

I'm glad the above answers all your questions. If there is anything else I can help with please reply back to me otherwise thank you very much for visiting JustAnswer and I hope we will see you again in the future.

Joshua, Lawyer
Category: Property Law
Satisfied Customers: 29201
Experience: LL.B (Hons), Higher Prof. Dip. Law & Practice
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