Buying A House Jointly With Parents

5 min read
Mother and daughter sitting on the sofa in their new home. Parachute Law's guide to buying a house jointly with parents

Can a parent and child get a mortgage together?

You can get a joint mortgage with parents. In fact, you can get one with up to three people, family member or not. This type of loan is more attractive when buying a house with parents, because when making a decision, the lender takes into consideration the sum of all incomes. This allows you to borrow more money and afford a better property.

At the same time, it gives you security. Most people will wait to buy a house with their partner, but if you haven't found the one yet, or simply want to be a bit more independent, getting help and buying a house jointly with parents might be suited for you.

Can my parents buy me a house and I pay the mortgage?

If you want to be the sole owner of the property, but are scared you can't afford it, your parents can still help you.

In order to do that, you will need to get a Joint Borrower Sole Proprietor mortgage. This allows you and your parents to share the responsibility of a mortgage together, but you will be the only legal owner of the property.

In order to get this mortgage, you will need to get Independent Legal Advice. We can help you with that.

How do you split ownership of a house?

If you choose to get a joint mortgage with parents, you will also share the ownership of your house. It is best to clearly state who owns what from the beginning. Joint ownership of a property can come in two different types, each having its pros and cons. You will need to choose what is best for you.

Joint Tenants
Tenants in Common
  • Property shares will be split equally between you (i.e., 50/50 if you're only buying with one parent)
  • You cannot sell the property without having the other owner's consent
  • You can split 100% of the property shares between you, as you see fit
  • You can get a Deed of Trust, which will legally define the terms of the ownership and how to sell
Although buying a house jointly with parents may seem like a safe option, circumstances can often change, so it is best to be prepared. Make sure all the terms are clearly defined beforehand.

Don't forget that in the case of a parent-child joint mortgage, all parties involved are responsible for the monthly repayments. Oftentimes, parents only want to help their children borrow a larger sum of money and have no interest in living inside the property.

If your children fail to make the monthly repayments, you will be liable to repay the debt yourself.

Should you buy a house with a relative?

This depends on the reasoning behind the purchase. As a parent, buying a house with your children can significantly help them step up on the property ladder. However, depending on the arrangements you opt for, this may incur more costs.

For a parent-child joint mortgage, you will share the repayment responsibility, as well as the ownership of the house, regardless of whether you choose to live in it or not. Because of this, you will not receive a first-time buyer status and won't be able to benefit from any first-time buyer help, like the First Home Scheme and you will not be able to claim first time buyer relief.

You qualify as a first-time buyer as long as you've never owned a share in any property, both in and outside the UK. When buying the property, you will also need to turn it into your main residence.

In addition to not getting any first-time buyer relief, you will also need to pay Higher Rates of Stamp Duty Land Tax, which are applied to second properties.

What happens to a jointly owned property if one owner dies?

The death of one co-owner will mean different things, based on the type of joint ownership you've agreed upon.

For joint tenants, when one owner dies, their share is automatically transferred to all the other owners. Any other children or spouses, who would normally be the beneficiaries, are unable to inherit their share of the property.

If, however, you're tenants in common, the deceased owner's share will go to whoever is named in their will.
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Are you buying a home jointly with parents? We can guide you through this process.

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