# Can a child take over parents mortgage in arrears



## leitrimlad (18 Apr 2021)

Hi, 

My parents mortgage of approx  400kk(family home and in mortgage arrears ) is unsustainable has been  taken over by a vulture fund.  Is it possible for me to get a mortgage on the family home of say 240k (3.5times my income )  and would this be something the fund would look at. So I suppose I have three questions and then any other general advice that people could provide 

1. Is it possible to take over a  mortgage in negative equity/would my bank provide such a loan  
2. Would the fund enter into such a negotiation even with such a difference between what I can provide and the mortgage outstanding. 

Any advice welcome 

Kind Regards, 

Leitrimlad


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## Brendan Burgess (18 Apr 2021)

No, you can't take over a mortgage from someone else. 


How much is the house worth? 

How much are the arrears? 

Who is the lender? 

How much of a deposit do you have? 

The simplest would be for you would be to take out an ordinary mortgage with a bank and buy the house from your parents. 

But the big problem with that is that you will not be able to buy a house for yourself. 

Brendan


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## Brendan Burgess (18 Apr 2021)

What ages are your parents? 

What are their incomes? 

Can they afford to pay any mortgage? 

Brendan


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## leitrimlad (18 Apr 2021)

Thanks for coming back to me Brendan, 

Parents are very low income, on pensionable income and they have been making interest only repayments of 400 and approaching retirement age...68. I currently live in the house and have no intention to buy own home so will want to live in this as my pppr 

house is worth approx 450 and for 410 on the mortgage, not sure of the exact arrears but as over 68 with no realistic option of paying back I would say its the full 410, the lender is start mortgages. I would like to buy the house off them  using 250 from  a mortgage and would also need the inheritance allowances(hoping to use for deposit)  but recognise there is a  good gap there that would need to be written off. Is it crazy to think that they might entertain this offer. 

If possible I would like to buy the house from them


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## Brendan Burgess (18 Apr 2021)

leitrimlad said:


> would also need the inheritance allowances



What are "inheritance" allowances ? 

Brendan


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## Brendan Burgess (18 Apr 2021)

If the house is worth €450k and the mortgage is €410k, why would Start accept anything less than the full €410k? 

If you can buy the house for €410k, fine. But no, they will not accept an offer of less than €410k.

Brendan


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## NoRegretsCoyote (18 Apr 2021)

Your parents have equity of €40k. You can borrow €240k. Why won't you buy a house together?

Assuming you live in Leitrim, €280k buys a decent house for three people to live in, and your parents could forget about a mortgage for their retirement.


Alternatively they could drag it out potentially forever. Unlikely anyone will grant a possession order on an elderly couple who are making IO payments.


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## leitrimlad (18 Apr 2021)

Thanks Coyote, have original connections to Leitrim but house not there,  preferabley would like to keep this home as family home for many years 

@Brendan Burgess sorry was referring to the 335 allowance


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## Thirsty (18 Apr 2021)

This may sound callous, and I've no wish to be disrespectful.

But assuming your parents have life assurance on the mortgage; their best option may be to stick with the interest only & let the life assurance pay off the capital when that day comes.

Another option, if you can afford the full mortgage; you could pay it yourself & draw up an agreement with your parents that the property will be left to you.

At that time, if there's no life assurance, you might be in a better position to either sell up or take out a new mortgage in your name & redeem your parents mortgage.


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## Brendan Burgess (19 Apr 2021)

Thirsty said:


> But assuming your parents have life assurance on the mortgage; their best option may be to stick with the interest only & let the life assurance pay off the capital when that day comes.



Mortgage protection pays out only if the borrower dies within the period covered by the policy. As this mortgage has passed its maturity date, it's extremely unlikely that there is a mortgage protection policy in place. 

And, even if there were, it would require the agreement of the lender.  They have already indicated that the mortgage is unsustainable and want the parents to repay the mortgage, which they can do by selling the house.

Brendan


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## Clamball (19 Apr 2021)

You seem really confused LeitrimLad and there seems no way you will be able to live in the house as your PPR.  Again I don’t mean to be harsh but what you have said makes me think you and your parents are ignoring the main issue, they owe €410K and have no plan to pay it back.


Your parents owe €410K you think
Paying €400 interest only per month
House value €450K
They only have old age pension as income.
You are earning €68K per annum
You think you will get an inheritance of at least €335K when your parents die.

Sometime between now and after your parents die the house will be sold and you will end up with no home and no inheritance.

As far as I see it you have two options

1.  Buy a home in your own name to the value you can afford with your potential €240K mortgage.  Move there with your parents.  The bank sells their home and clears the debt.

2.  Start paying your parents rent.  I doubt if you are paying them rent if they are only paying €400 a month interest only.  Then gift them €3K each per annum so they can make further payments off the mortgage.  When they die, sell the house to clear the remaining mortgage. you may have a small inheritance of some equity in the house.

Otherwise I see three adults living practically free in a house, way beyond their means, with some odd ideas about how they can ignore a €410K debt.   I think the fact you don’t really know the full extent of the debt really brings home how much the three of you are ignoring the elephant in the room, the €410K debt.


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## NoRegretsCoyote (19 Apr 2021)

@leitrimlad 

You've used the phrase "family home" three times in three posts. People have emotional connections to a set of bricks and mortar that often blinds them to the solutions.

You have three related people who want to live together who have a housing need. Focus on doing that in a sustainable way that keeps everyone happy. The "family home" might be part of that, or it might not. You'll still be able to move this with parents in late 60s but it gets much harder as they get older.


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## Monbretia (19 Apr 2021)

I feel what the op means by inheritance/335 is that he wants to use the inheritance threshold to cover the 'gift' of the value of the house between what he can borrow to 'buy' it from parents and it's actual value.  I don't think he is expecting an actual inheritance of any sort really.

I can see the thinking behind the plan but it falls down by the fact the house is worth more than the outstanding debt, lender is unlikely to offer any sort of deal, be different if it was in negative equity there might be better chance.


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## Jim Stafford (19 Apr 2021)

Your parents could, in theory, keep their house if they entered into a PIA with you as a guarantor making monthly payments. . However, in practice, this is unlikely in this case as your income is not high enough to pay off the mortgage within 20/25 years. Could your patents rent out a room under the Rent a Room scheme?

Are you certain on the house value of €450,000. If the house is is Dublin and its value is less than €395,000 they could avail of the Mortgage to Rent Scheme.  

Jim Stafford


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## Thirsty (19 Apr 2021)

_Mortgage protection pays out only if the borrower dies within the period covered by the policy._

Life assurance however pays out on death; it's worth checking if there is any in place

_As this mortgage has passed its maturity date..._

I think the OP should check the documentation and get all this information together. OP seems hazy on the details.

_They have already indicated that the mortgage is unsustainable.._

OP says they believe it's not sustainable, but I didn't see from the post that the VF have indicated property should be sold?

_..selling the house._
To live where?

OP how much is the full mortgage payment? Can you get all the documentation pulled together.

One piece of advice - don't ring the VF - everything should be in writing. If VF ring you / your parents, tell them to put it in writing.

Edit to add: As has been pointed out  repossession can take a very long time. Use that time wisely.


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## lff12 (5 Jul 2021)

Monbretia said:


> I feel what the op means by inheritance/335 is that he wants to use the inheritance threshold to cover the 'gift' of the value of the house between what he can borrow to 'buy' it from parents and it's actual value.  I don't think he is expecting an actual inheritance of any sort really.
> 
> I can see the thinking behind the plan but it falls down by the fact the house is worth more than the outstanding debt, lender is unlikely to offer any sort of deal, be different if it was in negative equity there might be better chance.


Except you don't get to take an inheritance while they are still alive!
And you cannot "gift" someone a home you don't own.


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