The solution seems simple: my wife and I could remortgage the family home, buy the flat that my daughter is interested in, grant her an informal mortgage and allow her to live in the flat rent-free. She can pay off the mortgage directly to the bank – when the balance is zero we would transfer the ownership of the house to her.
Can you get CGT if you remortgage your home?
You could avoid CGT altogether if you remortgaged your home to raise £200,000 to lend to your daughter so that she could buy the flat in her name only. But for this to work well, you would need to take security over the flat to secure your loan, which could mean high bill for legal fees.
Is it worth remortgaging if you have little equity?
You have very little equity. If you need to borrow more than 90% of the value of your property – then you’ll often find it difficult to find a better rate. Although at the time of writing, there are more mortgages at 95% than we have seen for a long time so it’s worth checking to see if it’s worth switching.
Is it worth it to remortgage from one bank to another?
It’s always worth asking your current lender to let you switch to another of its deals (ie, do a product transfer) by paying a reduced early repayment charge. You’re unlikely to get to move to its top-of-the range deal but as long as it’s better than the one you’re currently on, and doesn’t lock you in for much longer, you have nothing to lose.
Can a parent give their daughter a mortgage?
Understand, though, that any existing mortgage on your home remains your responsibility even if you’ve added another person to the title. Parents wanting to give mortgaged homes to their adult offspring must be creative to do so. If she’s mortgage-qualified, your daughter could buy your home at a price equal to its mortgage balance, perhaps.
What can I give my Daughter to buy a house?
If your child can’t qualify for a mortgage to buy your already mortgaged home, consider cosigning. You may also be able to refinance your existing mortgage loan, add your daughter to it as co-borrower and become co-owners of your home. The IRS may scrutinize the the gift’s equity value.
What happens when I buy a house for my parents?
Other than having the deed and mortgage loan in my name, they live their like its their own. They pay for any improvements in the house and we do not have a rental contract. Upon repayment of the mortgage loan, the home will be transferred into their name.
