Swap houses with parents (with mortgages)???

Discussion in 'General Property Investment Discussion' started by Mac Grant, Jul 3, 2017.

  1. Mac Grant

    Mac Grant New Member

    Hello all

    I'm looking for some advice.
    • My parents have a £90k mortgage outstanding on a property valued conservatively at £285k

    • My wife and I have a £140k mortgage on a property valued conservatively at £190k

    • We would like to swap houses and leave my parents with no mortgage (we take on a larger mortgage)

    • We don't have the cash to buy their house outright.

    • We would happily sell either house to each other at below market value if that would help.

    Is there a 'smart' way to do this, bridging loan, remortgage etc or is there another technique for doing this?

    If anyone has any experience or advice I'm all ears...


  2. Longterminvestor

    Longterminvestor Administrator

    One thing I would say, selling the properties at below market value might attract the attention of the tax man :)
  3. nmb

    nmb Well-Known Member

    It might be better to take advice off a solicitor for this one as it might come back to bite you in the bum if not done correctly. Talk of selling at below market value scares me - hope the tax man is not watching :)
  4. The Mortgage Broker

    The Mortgage Broker New Member Forum Partner

    Hi Mac,

    If you both sold your respective houses to each other, your parents would be left with £195k cash / equity to buy your house outright with no mortgage. (285k - 90k outstanding)

    You would have 50k equity, selling at 190k less the £140k mortgage (excluding fees and costs etc) and then you could use this as the deposit to purchase your parents house and therefore have a £235k mortgage. (£285k purchase less £50k deposit)

    This is all very simple to do subject to passing credit scores and affordability etc. Its a clean, simple, non tax evasive structure, thus it wont turn around and bite you a few years down the line as everything is above board.

    if you would like to discuss further just drop me a line.
    [email protected]

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