First Time Buyer needs advice

GemQuin

Hello,

Strange question but would I get a better mortgage deal as a First time buyer or if I already owned a property?

My mum wants to change the deeds of her flat over to my name.....but I am currently looking for somewhere to buy for myself. Wondering if I should wait for the deeds to be changed. I don't need anymore money - I can already borrow what I need as a first time buyer, but in terms of paying back the mortgage which status is better.

Also, in this current market - what would you offer on a flat for £299,950?? Any chance I might get it for under the stamp duty threshold of £250K or wishful thinking?

Thanks for your advice.

brit1234

Be very carefull what you do. You should calculate that you could afford the mortgage when rates go up as they have started to now. Remember inflation next year is going to be a big problem, ithink cpi is still over the national limit.

The housing market is in the bull trap stage, you better off holding out a few months and seeing which way the market is going, I predict down big time due to being still hugely overvalued.

Cissi

I can't answer your question re mortgage, but this sounds quite complicated to me, and full of potential pitfalls - I think you need legal advice. A few points that spring to my mind are:

Why does your Mum want to do this? If it's with a view to avoid paying for care later on, be careful, I don't think it's as easy as all that. Also, if she was to die before 7 years, you'd be liable for inheritance tax.

I take it you'd live in your new flat, and Mum would stay where she is? Will she be paying you rent? I think you may be liable for income tax, as well as CGT on any future increase in value (although that seems unlikely in the short term).

I'm sure someone more knowledgeable will be along in a minute!

GemQuin

Oh Blimey - I didn't realise there would be so many implications to changing the name on the lease.

Basically what is happening is that I am staying in her flat (mortgage paid off) and then buying her a new flat, where I will be paying the rent, but she will be living.

Am I still liable for CGT and & income tax?

So if she dies within 7 years of changing the name over I have to pay inheritance tax?

Oh dear - more confused now!

penguine

£299k for a flat sounds incredibly expensive to me. Even if you could get the price down to £250k -- that's a quarter of a million pounds. For a flat.

Think very carefully before you proceed any further with this idea. The implications of swapping properties around with your mum seem risky enough on their own. But factor in the possibility of a prolonged recession, with increasing unemployment, the strong likelihood that interest rates will go up again in a few years' time -- and that you may not want to live in the flat your mum is signing over to you forever -- you could be about to make the worst financial decision of your life.

Also if you're buying a flat that you're not planning to live in yourself -- you may be required to get a BTL mortgage.

dogbot

£299k for a flat sounds incredibly expensive to me. Even if you could get the price down to £250k -- that's a quarter of a million pounds. For a flat.

I don't think you have heard of London.

Cissi

GemQuin wrote: »

Oh Blimey - I didn't realise there would be so many implications to changing the name on the lease.

Basically what is happening is that I am staying in her flat (mortgage paid off) and then buying her a new flat, where I will be paying the rent, but she will be living.

Am I still liable for CGT and & income tax?

So if she dies within 7 years of changing the name over I have to pay inheritance tax?

Oh dear - more confused now!

I'm certainly not an expert on any of this, but I'm pretty sure the new flat would be considered a second property, so yes, liable for CGT and income tax - plus the mortgage would probably have to be BTL, unless you took it out on your mum's current flat. If it's on the second property the mortgage payments may be tax deductible, but I think you need to speak with an accountant

RobertoMoir

dogbot wrote: »

I don't think you have heard of London.

You obviously didn't check the person's location before replying to them. And a quarter of a million pounds is a lot of money for a flat. Just because a lot of flats in London go for stupid money, that doesn't make it any less stupid.