Changing name from parent to child on mortgage

hairsalon

Hi - we visited a solicitor today to query this but they did not provide a satisfactory answer I was looking for (or much advice in general other than to make appointment with bank manager). I have an appointment with bank manager now in 2 weeks booked but would like someone's opinion on this before I dive in head first:

The story is that my parents are divorced with 3 properties that are not divided between them as of yet - solicitor has advised us before that they won't even entertain the idea because of security concerns.
There is mortgages outstanding on all.
My father wants to only hold onto one house and wants nothing to do with the others and he is planning on getting married soon.
I would like to change the name on the mortgage from my father's to mine on 2 of the mortgages (with both parents consent of course). Ideally I would like to take over one of the mortgages completely on my own - but that may be more tricky than the former.

My question is would be bank entertain the idea given that my financial situation is more secure than my father's?
Would me and my mother have to be assessed for a new mortgage or can the original mortgage be amended?

Thanks

Slydice

I'd say it's possible.

What amounts are the houses (you want) worth and how much mortgage is outstanding on each?

Ray Palmer

Talk to the bank is really the only way forward. Your parents would be gifting you equity and there are tax concerns on that too.
You need to know exactly what you are getting. Too many unknowns in what you have said.

hairsalon

Well the mortgage I want to take over is about 300k-ish.
Would I have to "buy" that house from my parents and apply for a mortgage separately - or can they just transfer it in my name?

Where is the information available on tax related to this would anyone know? I scoured the revenue site - the info I found is very vague - nothing specific. Do revenue review this on case by case basis also?

StillWaters

If there is a 300k mortgage, you will need to raise a mortgage for that amount. It is not as simple as just transferring names on the mortgage or deeds. I assume the equity in the house is below the gift tax threshold.

ted1

If the house was on the open market would it be worth 300?

hairsalon

Well honestly its hard to know without putting it up for sale - there aren't any houses up for sale at the moment in the estate.

My main concern is changing the name from my father's to mine - so we will look into doing that first so myself and my mother would be responsible for the mortgage.

whippet

hairsalon wrote: »

Well honestly its hard to know without putting it up for sale - there aren't any houses up for sale at the moment in the estate.

My main concern is changing the name from my father's to mine - so we will look into doing that first so myself and my mother would be responsible for the mortgage.

As far as I know you can't just change the name on a mortgage, as many couples in negative equity are finding out when their relationship breaks down.

You will need to apply for a new mortgage on the property, with all the usual 10% + deposit, ability to pay etc ...

It's not a nice situation, but from the banks perspective they are transferring the liability for a debt to someone else, that other party will need to apply to show suitability and ability to service the debt.

Ray Palmer

The value of the property is considered by tax office. Gift and inheritance tax applies which is pretty straight forward and on revenue. ie
You will most likely need to take out a new mortgage. You will be liable for stamp duty on purchasing the properties although reduced when between relatives.
I find it odd your solicitor didn't mention this stuff. It does depend on the bank but the tax issues don't go away. An accountant might be better.

the_syco

ted1 wrote: »

If the house was on the open market would it be worth 300?

This. Most likely the house is now worth something along the lines of €200k, and thus you won't get the amount needed in the "new" mortgage.

Zamboni

hairsalon wrote: »

Hi - we visited a solicitor today to query this but they did not provide a satisfactory answer I was looking for (or much advice in general other than to make appointment with bank manager). I have an appointment with bank manager now in 2 weeks booked but would like someone's opinion on this before I dive in head first:

The story is that my parents are divorced with 3 properties that are not divided between them as of yet - solicitor has advised us before that they won't even entertain the idea because of security concerns.
There is mortgages outstanding on all.
My father wants to only hold onto one house and wants nothing to do with the others and he is planning on getting married soon.
I would like to change the name on the mortgage from my father's to mine on 2 of the mortgages (with both parents consent of course). Ideally I would like to take over one of the mortgages completely on my own - but that may be more tricky than the former.

My question is would be bank entertain the idea given that my financial situation is more secure than my father's?
Would me and my mother have to be assessed for a new mortgage or can the original mortgage be amended?

Thanks

The bit in bold is important here.
Your father cannot gift you as asset with a sizeable debt in his name.
Nor should absolve him of this by attempting to take on a debt for an asset which is worth less than outstanding amount.
Your father has a responsibility here and assuming the bank allow a sale you should ensure your father sells you the house for a fair price and that you are in a position to finance such a purchase.