mortgages ?

maccapacca said:
Interest only, you'll only pay tax on the repayment and in 30 years when it's tripled in price the price your paying now will be insignificant.
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But new regs mean that you must have a repayment vehicle in place for the capital and prove it to the lender.

Plus with a BTL mortgage you need at least a 25% deposit mimumum. Most lenders require 40% and proof (as the property is not currently let) that you can afford the repayments in addition to your current outgoings, including your own mortgage / rent.

As a FTB going down the BTL route is hard enough anyway and a possible pain in the derriere if the tenants cause problems.
 
David _b said:
i think the buy to let option, is a non starter, as a first time buyer
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Just buy it for yourself and get onto the ladder. You should be safe in the knowledge that your Dad is not going to sell you a house with hidden problems which is half of the problems buying a house anyway, especially if it is an older property.
 
PapaLazaru said:
Just buy it for yourself and get onto the ladder. You should be safe in the knowledge that your Dad is not going to sell you a house with hidden problems which is half of the problems buying a house anyway, especially if it is an older property.
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I am sitting in it now, have been for 27 years. Looks ok to me from this angle lol :p

So repayment mortgage it is. With possibility of in a year, re-mortgage as BTL.
 
I have an idea only if the house is now mortgage free!!!!

Why dont you get your dad to sell you the house for a nominal fee of £1000 cash. Get him to sign the house over to you. Then you remortgage the house and pay your dad back. Thats the only legal way I can see. I am no expert but I think this is possible, it just depends on remortgage value and what you can get.

This will also give you the ability to rent out, but again this will also lower remortgage value. So your dad gets less but then you could arrange a sly repayment with dad for the short fall. ;)

There is always a way! :D
 
Does your dad need the money in one lump sum?
Can't you pay him £60K or however much it is in nice equal monthly payments from now until 20XX ?
 
Can someone explain why you need a BTL mortgage to rent out a property? Is it illegal to rent out a property on a repayment mortgage? If not what is the benefit of a BTL?
 
On a residential mortgage you will be hit with a 2% loading on your monthly payment for unauthorised letting. This reduces to 1% once authorised by the lender. This is the case with Amber Homeloans and North Yorkshire Mortgages. A BTL mortgage is a commercial venture in essence. Nothing like you buying a house for you and the woman and/or kids.
 
rubberduck said:
Can someone explain why you need a BTL mortgage to rent out a property? Is it illegal to rent out a property on a repayment mortgage? If not what is the benefit of a BTL?
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On a normal mortgage your lender will usually say you aren't allowed to let the property out, or as stated will charge you extra. A BTL mortgage the lender is OK with you letting out the property.

You have to do as the people giving you the money tell you.
 
The_Abyss said:
You've just described value shifting. In this instance there's potential CGT and IHT avoidance.
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Where's the CGT impact? It is the primary home.

IHT would come into it if the father has the possibility of popping the clogs in the next 7 years but house isn't anywhere near his allowance of £350k.
 
I have 2 properties, both with mortgages. After living there initially for 2 years, my first is now being let out, managed by an letting agent, still on a residential tracker interest only mortgage. I phoned the mortgage company before I did this and they gave me permission to let it at a cost of £95 a year. Given it's interest only, I am using the extra income to invest/save so I can pay some/most of it off in the event of BoE interest rate rises. My second is a recently purchased residential repayment mortgage.

My feelings are that if you can live there initially - working out the finances with your dad + a proper residential mortgage, you will be in a far far better position in a year or twos time to either get permission to let on your existing mortgage or get a proper BTL mortgage (you might have a little more equity to play with if it increases in value).
 
Kemik said:
Where's the CGT impact? It is the primary home.

IHT would come into it if the father has the possibility of popping the clogs in the next 7 years but house isn't anywhere near his allowance of £350k.
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I was under the impression that CGT would potentially apply to the son who bought it http://www.hmrc.gov.uk/cgt/property/basics.htm#6. Especially if the transaction was for just £1,000.

Agreed on the IHT but we do not know the value of the remainder of the estate nor the value of any gifts made in the previous 7 (or indeed, 14) years.
 
Ok looks like there is a little bit of misinformation in this thread

I have done this.

We bought our house of the inlaws. Price £140k we got a mortgage for £125k Paid £110 of that for the house and the inlaws kept £30k in it. Leaving £15k for a new kitchen etc. All done through a lawyer.

They have a 2nd charge on the property. Bank obviously have 1st charge.
We worded a contract that they had a 18% stake in the house and when we sold they would get 18% back. (hoping to increase its value)

You could do the same but get your dad to rip up the contract after you have the house.
 
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