Hi Stokesy,
Although banks may understand your parents are in financial distress, you just simply can’t take over your parent’s mortgage. It’s because a bank can't simply approve a home loan with no property or security attached to it.
As the property title is in your mum and dad’s name, the property will need to be used to pay out the existing mortgage. However, there’s an exception to this. That is if the loan is an “assumable” mortgage by the bank’s definition.
This means the mortgage would have to be free of a due-on-sale clause and there would be a fee charged for assuming the home loan. The issue is that due-on-sale clauses are on all modern-day home loans so assuming a mortgage is no longer possible.
Instead, you could try “favourable purchase arrangement”, which is your parents selling you the property at or below market value, or you could just add yourself to your parent’s mortgage with the help of a solicitor.
In the latter, essentially, you’re taking on partial responsibility for the mortgage but you’re not entitled to anything should the property be sold.
If you would like to know more about this, including standard bank lending policy, you can check out our website. You can also speak with our specialist mortgage brokers by calling 1300 889 743 or completing in our free online assessment form.
Cheers,
Is it possible to take over my parent’s mortgage?
- Otto Dargan
- Mortgage Specialist
- Posts: 7730
- Joined: Sat Sep 06, 2008 5:55 pm
- Location: Sydney, Australia
- Contact:
- Otto Dargan
- Mortgage Specialist
- Posts: 7730
- Joined: Sat Sep 06, 2008 5:55 pm
- Location: Sydney, Australia
- Contact:
Re: Is it possible to take over my parent’s mortgage?
Yeah sure, Stokesy.
In a favourable purchase, your parents could sell the property to you at a price equal to the mortgage balance, bearing in mind there will be stamp duty and other costs for transferring ownership, just like a normal sale. And they could pay off their mortgage from the sale.
The majority of banks will require you to have 5% in genuine savings no matter how much the property value has been discounted. Luckily, some lenders will allow you to buy a property below market value without any savings of yours.
Also, you could borrow the entire 100% of the purchase price (not the property value) from one of our lenders.
Our mortgage brokers are specialists in helping people to borrow 100% of the purchase price of a favourable purchase. Call us on 1300 889 743 or complete our enquire online and one of our mortgage brokers can help you to finance your purchase.
Cheers,
In a favourable purchase, your parents could sell the property to you at a price equal to the mortgage balance, bearing in mind there will be stamp duty and other costs for transferring ownership, just like a normal sale. And they could pay off their mortgage from the sale.
The majority of banks will require you to have 5% in genuine savings no matter how much the property value has been discounted. Luckily, some lenders will allow you to buy a property below market value without any savings of yours.
Also, you could borrow the entire 100% of the purchase price (not the property value) from one of our lenders.
Our mortgage brokers are specialists in helping people to borrow 100% of the purchase price of a favourable purchase. Call us on 1300 889 743 or complete our enquire online and one of our mortgage brokers can help you to finance your purchase.
Cheers,