Buying flat from mum, EA fees, mortgages and other Qs

wondershrimp

my mum is in serious financial bother and is selling a flat (that she is currently renting, but the tenant will be leaving in a month). i'm worried that she is so desperate that she will be forced to sell at a very low price, so i'm putting together a plan to match/ beat any stupid offers that she gets.

to do this i will be getting a mortgage, if i ended up buying the flat it would be for a good price, but would i/mum be able to avoid paying the EA fees?

i don't have a mortgage at the moment, and have a pretty decent job, i can afford the mortgage even if the flat remains empty (although naturally i hope it doesn't!) will i need to get a buy-to-let mortgage (with a higher deposit) or will i be able to get a normal mortgage? as i say my salary can cover the repayments, makes quite a difference if i can get a normal mortgage.

i really this plan may sound a bit potty, and i hope that somebody makes my mum a reasonable offer on her flat and none of this is necessary, but does anyone have any thoughts/help?

thanks

googler

If you can afford to do this, why not just have your mum stay in her home, and you help her out financially?

You'll need something of the order of 20-25% deposit in order to buy, if you've got this, why not just give it to your mum so she can stay in her home?

I assume she doesn't really want to move.....

dzug1

On EA fees - it depends on the contract between your Mum and the estate agent, but there's a high chance you would be liable for the fees.

BexInLondon

googler wrote: »

If you can afford to do this, why not just have your mum stay in her home, and you help her out financially?

You'll need something of the order of 20-25% deposit in order to buy, if you've got this, why not just give it to your mum so she can stay in her home?

I assume she doesn't really want to move.....

I don't think it's actually the mother's home - it's a rental property.

mlz1413

Is the flat concerned an investment property that you are prepared to buy and continue to rent out?

If so could you not just buy 50% with your mum and therefore be joint owners and joint liability. You probably won't be able to do this on mortgage unless its a joint mortgage. A B2L mortgage probably won't lend you more than 60% LTV at the mo.

You don't have to buy through an EA and so don't have to pay them fees, but if you mum is signed up for 8 weeks then you won't be able to buy it within that contracted period without being liable for fees.

wondershrimp

yes, i'm not talking about buying my mum's home!

the plan, such as it is, is to buy a flat that she currently rents out. the deposit may be a stumbling block. so thanks for that, i'm just off for a chat with the bank.

i'm already starting to pay for some of her bills! i'm hoping that this plan would put an end to that. if i ended up buying the flat i would re-sell it at some point (after renting it out if poss).

wondershrimp

that might be a good idea mlz1413, i'll look into it.

would it matter in that case that my mum's credit rating is shocking? mine should be pretty good, and the amount being asked for should be well within salary multiples (even more so if i'm only buying half).

mlz1413

does she have a mortgage on the property already? if so that lender should continue to lend to her. For new lenders then yes your mum's credit rating will be an issue if its joint, but its up to each lender and how they calculate risk.

wondershrimp

my mum has 3 (!) secured loans on her home, and none on the flat. as you can imagine i'm keen to see her pay of as much of these loans as possible with the proceeds of any sale.

her current loans are at 10% which was pretty schocking when she took them out (interest only) whereas i should be looking at 3% or so.

thanks for your help on this, i've made an appointment to see my bank on monday.

BexInLondon

Eeek please be careful. In the nicest possible way, she sounds like a bit of a moneypit! Don't let your own finances get dragged down too.

poppysarah

In the same way I wouldn't advise always bailing out a child, the same goes for parents.
They should be old enough to manage their own financial affairs. When they create this sort of problem and you bail them out, do they learn from the experience.
If you think your mum will, then go for it.