Providing security for a son's attempt to re-mortgage

[UKSAF2002]

Mr A is seeking to raise a mortgage circa £100K but is finding it difficult to provide sufficient security. His mother is willing to transfer her house to him to provide him with an asset worth circa £150K but will still need to reside in the house concerned. It would appear that Stamp Duty would be payable on the transfer; that for IHT purposes the transfer will be ignored and so depending on circumstances at time of death an IHT liability may arise; that Mr A could be liable also to CGT when & if he disposes of the property. Is there a more tax efficient way for Mr A to achieve the increased level of security he needs. Finally, because of changes to mortgage lending rules the lender is not willing to provide funds using the house in the mother's name as she will have no beneficial interest in the mortgage. Hopefully, someone out there can help us please.

UKSAF2002

[Graham1]

If mother working consider using her as a guarantor.

U do not quote your income or LTV; you may want to consider self-certification.

Consider using a mortgage broker as they know lenders tolerances and have 'friends' (I had a similar problem a few years ago and now have five mortgages) you may have to look at sub-prime lenders; you may pay a little more interest initially and the broker will want about 1%, then look to change lender after a year or so (for better rate): watch out for ‘overhang’ redemption-penalties and MIG’s.

Get a copy of What Mortgage etc., and call ‘small’ brokers, only give up when you have had 30 rejections.

Good Luck.

Graham