Buying house direct from landlord
- Thread starter Camalot
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Soldato
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As long as it had been arranged properly you would be entitled to a percentage of the sale price based on your percentage ownership I would think
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Soldato
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It would be his to sell and would be exactly the same as what you would do if you sell your house with an outstanding mortgage on it.
I wouldn't be buying a house that isn't via a mortgage, doing what the landlord suggested is just a recipe for disaster later down the line. Getting your equity out will be an absolute cluster if your circumstances change and you want to move or loose your job or something. Is the house even the landlords to sell (does the bank still have an interest)?
Have you been to a broker to find out you cant get a mortgage? I think you would be surprised on what a bank is willing to lend on these days with minimal deposit, even with all the new rules. It's possible to get a mortgage with 5% deposit, a 5% deposit on a £150k house is only £7.5k, its not exactly the earth shattering amount of money the media would have you believe you need. Long term renting is just dead money for most people and it will harm your quality of life when you are a pensioner still having to shell out your minimal income on rent.
I'm confused, what return does the landlord get? The only way I can see him making any money on it is if he is effectively acting as the mortgage provider and charging the op interest, but then for anything near market rates, surely that would still be less than any return from rent?
Well the story has changed quite a bit from the initial OP. If he's a close friend and genuinely trying to help you out then only you can make the call as we don't know him. We can point out potential problems obviously which has mostly been covered.
Say the boiler goes pop after you've made this agreement, who pays for it (and general upkeep for that matter)? Are you an owner or a Tennant?
Soldato
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Did you even read the post you quoted? The landlord doesn't have a mortgage on the property. And doing what is proposed is getting out of exactly what you mentioned, dead end renting, by putting the money towards equity in the house instead.
Exactly, he owns quite a lot of houses all mortgage free and lots of land which he is now building more, hes easily a millionaire.
I haven't changed the "story", I've just been adding further information as questions are popping up in the discussion
The guy has really looked after me over the years to be honest, he purely offered it as a helping hand to me, he isn't looking to gain he already told me that.
I understand the "what happens if" comments, like boiler breaks who pays, or i want to move. These are the things im grateful to have pointed out so i can bring them up with him when i discuss the proposal further.
To be honest, i'm pretty confident i know how he will be. Everything I've done in the house or garden so far he has gave me access to his stores so i can help my self to materials, things that really i should pay for, he pays for the lot! I want to change my garage into a room so he told me to arrange it and he will pay, hes very good with me really!
I absolutely love the house and would love to start a family here, me and the mrs work 5mins down the road and the street is lovely and quiet. Gardens are massive and not overlooked, which is why im very interested in this proposal!
I'll speak more about the selling the house in the future question, i think he will say i'll just get a % of the value of the house or something like that.?
And I know some millionaires who are Mr Nice Guy. So probably means that there are various types of people around.
If this were me and I went through with it I would absolutely structure this as two separate things. 1) A house purchase for £x and 2) a loan agreement over Y months for £z per month, total payable.£A That way ownership transfers to you immediately and your landlord then replaces a mortgage lender. If written correctly the biggest risk is the "landlord" calling in the rest of the money at some point in the future, but again you can protect against this with a well written contract.
If you want to exit at a later date then you know how much mortgage is needed remaining months times £z.
Soldato
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The way you should do it, and this is the way I've dealt with for people before (although it's usually inter-familial) is that you are effectively buying it in the exact same way you would if you were buying it from him outright with a normal mortgage. You take ownership on day 1,and you are responsible for all outgoings, maintenance etc as it is your house. He takes a charge over the property for X amount with whatever repayment and interest terms you agree. This secures his money as he will get the full balance owed if you sell.
Exactly, he owns quite a lot of houses all mortgage free and lots of land which he is now building more, hes easily a millionaire.
I haven't changed the "story", I've just been adding further information as questions are popping up in the discussion
The guy has really looked after me over the years to be honest, he purely offered it as a helping hand to me, he isn't looking to gain he already told me that.
I understand the "what happens if" comments, like boiler breaks who pays, or i want to move. These are the things im grateful to have pointed out so i can bring them up with him when i discuss the proposal further.
To be honest, i'm pretty confident i know how he will be. Everything I've done in the house or garden so far he has gave me access to his stores so i can help my self to materials, things that really i should pay for, he pays for the lot! I want to change my garage into a room so he told me to arrange it and he will pay, hes very good with me really!
I absolutely love the house and would love to start a family here, me and the mrs work 5mins down the road and the street is lovely and quiet. Gardens are massive and not overlooked, which is why im very interested in this proposal!
I'll speak more about the selling the house in the future question, i think he will say i'll just get a % of the value of the house or something like that.?
Then buy the house off him outright with a mortgage and completely remove him form the loop. Doing anything else where he is still the owner and you are just paying him money each month is incredibly risky.
I mena, what kind of interest rate is he charging? DO you know that it will be a marketable rate? What if he increases rates in the future?
The whole thing is just a recipe for disaster. IF you like the house, then buy it with a real mortgage.
Soldato
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100% was.Not this guy is it
