Mortgages / Renting - I'm new to all this

Scuzi · 29 Mar 2006 at 01:20

I've been trawling the net trying to find info but there's so much info and jargon that I'm a bit overwhelmed. The situation is that due to his circumstances, my dad can't get a mortgage unless he puts down a huge deposit. I want to help him by getting the mortgage in my name and 'renting' the house to him. As far as I would be concerned, the house would be his until he passed away at which point I'd sell.

Now, due to my circumstances, I won't be purchasing a house in England until late 2007. If I had a mortgage in my name on a house in NI, even though it wouldn't be costing me anything, would it adversly affect my chances of getting a sufficient mortgage for my own house? This is my only real concern as it is hard enough as it is to get onto the ladder.

I want to go ahead with this as I'll be getting a house out of it to sell when the time comes, hopefully making a rather tidy profit (considering it won't cost me a penny until my father retires or passes on). Although, even as a sizeable investment, I don't want to ruin my chances of getting myself onto the 'ladder' 18 months from now.

I really don't know who I should speak to; my bank, financial advisor, solicitor?

Your thoughts, experiences and advice will be greatly appreciated

Rotty · 29 Mar 2006 at 01:32

this could be a real minefield of tax , tax relief and higher interest buy to let mortgages , the way to go would be to ket your dad live rent free and him to gift you money

re two mortgages then yes I would expect it to affect your chances on the 2nd regardless of where it is , I have mortgages on 2 houses and I had to meet the requirements of if the pair combined were a single mortgage on one property

Stretch · 29 Mar 2006 at 01:32

I'd speak to the bank first just to get an idea of what's possible, they're always keen to lend people money. Then maybe take further advice.

Why would the house in NI be costing you nothing?

Rotty · 29 Mar 2006 at 01:37

don't forget to take account on any property that is not your primary residence ( when you sell )

Scuzi · 29 Mar 2006 at 01:37

Rotty said:
this could be a real minefield of tax , tax relief and higher interest buy to let mortgages

That's what I'm afraid of. It's way over my head at the minute.

Stretch said:
Why would the house in NI be costing you nothing?

My dad would be paying the deposit, legal fees and the monthly repayments, although it would all be going through me, i.e. I'd pay it all from my account and my dad would pay it to me. This would continue until he retires as he will be living on a state pension and I'll be earning sufficent funds to support him.
Then, when he inevitably passes on, the house would be mine to sell.

Rotty said:
don't forget to take account on any property that is not your primary residence ( when you sell )

I take it you mean tax on the sale and whatnot? I'm not too worried about making a big profit as the main reason I want to do this is to help my dad out. Any profit would just be a bonus.