Sibling mortgage to buy out a parent

E

eiregal

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Due to my parent’s separation, the family home must now be sold. My mother can’t get a mortgage on her own to buy out my father due to her age and the fact she’s not working. Myself and my 2 brothers were hoping to buy out my father so my mother can stay on in the house. 2 of us are still living at home and the third is in Oz. Is there anyway we can get a mortgage/go guarantor for my mother on a mortgage while still retaining our First Time Buyers status when we go to buy our own homes? It would roughly be a €100,000 mortgage. Also, how much will my borrowing capacity be reduced by if I take out this mortgage?
 
Hi eiregal

The ownership of the house and the name on the loan can be separated.

So your mother can buy the house in her sole name, but the loan can be given to you and to her jointly.

As you won't own the house, your first time buyer status should not be affected. You might want to confirm this directly with Revenue or via the solicitor.

I would guess that if you still have 100k outstanding in three years, when you want to buy your own home, your borrowing capacity will be reduced by 100k.

If the three siblings get on well, I would keep it as simple as possible and use only one person to go as joint borrower. I would probably go for the person who is furthest away from buying their own home.

At a later stage, you can change the name on the mortgage to one of the other siblings. At that stage, perhaps one of the children will have built up sufficient equity in their own home to remortgage and repay the mortgage on your mother's house.

But I would focus on solving the immediate problem of keeping your mum's home now.

Brendan
 
Thanks for that Brendan. I had thought this too, that if the deeds of the house were solely in my mother's name then we would still be FTB but I have recently been advised that this is not the case. Apparently once one gets a mortgage to buy a house, whether their name goes on the deeds or not, they are seen as paying the mortgage and owning the house. I really need to clarify this with the Revenue. I'll get onto it straight away.

Thanks again for your help.
 
Revenue have said that first time buyer status is not applicable if parents take out the mortgage for a child who is buying a house since it is the person who pays the loan owns the house as far as they are concerned.
Isn't this the same kind of thing?
If it turns out that the first time buyer status of the siblings is not effected for the purchase of their own homes in the future then will they not have to pay stamp duty on the purchase of the house for their mother? (as it’s from their father the stamp duty payments will be much lower in this case as the purchase is from parent to child).
 
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