mortgages ?

David _b

David _b

David _b

Associate
Joined
28 Mar 2004
Posts
2,430
Location
N Ireland
So

I dont post here much, did years ago though. But thought would pop along.

Anyone own a house and let it out ? I have a chance to buy a house, off my dad, i am a first time buyer. he is also happy to let me pay him back outside the mortgage as well, say 15k over the next lot of years, so i will be lending 15k less than i need and avoid the interest on that.

I know nothing about mortgages. Whats the craic with the repayment mortgage and the interest only mortgages, whats the general one to go for ? And, i dont actually need to move out, i could carry on living with the parents and let this house, that idea appeals, so i am told i would need a buy to let mortgage.

Then on the letting side, i am told there is a lot of things to do with declaring income, how much i can avoid paying etc.

Just after a general feeling here, i do know it will be hard to get a buy to let mortgage being a first time buyer, was told way around it is to buy it with a normal mortgage then only tie in for one year, when i renew i am then a homeowner and will be able to get a BTL mortgage a lot easier.
 
PapaLazaru said:
I have a few things in response but the main one it will be nigh on impossible to get a BTL mortgage as a FTB when you are buying off your Dad at a discount.
Click to expand...

I spoke to 2 mortgage advisors. The first one basically said he will do me a normal mortgage and what i do with it is up to me. The second one was very down the line, told me i need BTL and she done a search, one lender was all she could get on her mortgage app, also had some strange conditions, one being i needed to earn 25k per year. It was her suggested i get a normal mortgage for a year, bum about, live in the house/decorate/whatever, then a year later come see her and she will renew with a BTL as then i will be in a better position, as a home owner.
 
for info, the house is valued at 60k, so not some mansion. The intention was get him 45k from mortgage, then 15k over the next while. I assumed that this would also put me in a better position, as basically i am lending much less than the house value
 
They dont need to know my dad has a interest, all they know is he decided to give me the house for 45k cause he is nice like that. And that the house is valued at 60k.

I have the deposit covered easily, have near 20k in the bank and earn a good wage too so can cover payments easily.

I just am perfectly happy at home still, hence the curious bit of buying it and letting it. Simply because i know its a good deal to pass up, weather i need the house or not
 
Also, another point. Related sort of, i have a gf. If she stays with me a few nights here and there, or even moves in with me, is there any situation that could arrise,,, should the relationship go breasts north, that she could have a "claim" on the house ?
 
itchy said:
Wont work sorry to say. :(

It is not upto your dad to value the house and except 15k less it is upto the lender am afraid. You need a BTL mortgage, so you looking in the region of 30-40% deposit.

Why not as said above just buy for yourself at market value? :confused:

As for interest only mortgages, whats the point if you never going to own it. Oh and you will also pay tax on your profit if you rent out.

For example (off the top of my head not real figures)

You borrow say 100K interest only and repayments are say £400 but your rental income is £800. Then you will pay tax in the £400 profit minus any costs such as maintance etc.

There are otherways round it but you dancing on the legal/illegal line. Thats what advisers do ;)
Click to expand...


reason is to avoid lending as much and paying interest on that amount. Instead i will pay the dad only whats owed. Zero interest.

I must say, this is a surprise about not letting the dad say what he wants to sell the house for. Its his house, he could sell me it for a fiver if he wants
 
Yep, agree

If anything though, i thought the lender would be more keen, as they are giving less than the house is worth. So there shelling out less money secured on something worth more, positive equity straight away
 
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.
Click to expand...

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.
 
Ok gents

going to wake this thread up as things have changed a bit


House is worth 60k, dad has decided he doesnt want that in his hand and can actually live with a decent amount up front, which i can do, then the rest in monthly payments, interest free.

Is there any legal issues with this ? Plan is give him 15k or so, then standing order the remainder off at say £400 a month. House will be paid in under 10 years.

All will be properly contracted up, with all sorts of details in it like if he croaks, or i croak, or i cant make payment, etc
 
So if he gifts me it. How is cgt calculated ? Given he is gifting it to me.

Edit, not actually gifting. More just letting me pay back directly
 
Last edited:
So if he transfers the house into my name is part of that process involving the tax man or at what point is he notified. And how does he get the value ?

And you say the tax is on the gain not the value. As in if I pick it up correctly your taxed on the difference in money the house was purchased for and what your now value is ?
 
Last edited:
Ye prices here are very level and things are looking brighter.

I am curious then, giving dad won't get the cash from me in one lump, as I intend to pay him off monthly, how is he meant to pay the cgt
 
You must log in or register to reply here.
Back
Top Bottom