mortgage advice

birdy1010

i live in my fathers house, which in reality is mine, but in his name. due to there being a high buy-to-let interest rate on the house, would it be more beneficial to put the house in my name, pay my fathers capital gains costs and any other fees and obtain a lower interest rate, or leave as it is???

eventually something must give!!

Cara79

Hi

You probably need to give some figures to see if you could take the property on. Presumably your father would be happy to sell to you?

What is the property value?
What is your salary?
Have you got any debts etc?
Does your dad's mortgage have any redemption penalties etc?

With ref to capital gains tax, I think this is in relation to difference between the value of the house when your dad bought it against the value today. There is also an exempt amount, have a figure of £4k in my head for some reason.....but I think someone will be along who knows more than me on that.

If you can post details about yourself and the house, then we can see if you can take on the mortgage.

Cx

birdy1010

thanks cara.

current house value - #182,000
salary - #33,000
no debts (#15,000 in an ISA)
unsure of redemption penalties at the moment.

silvercar

CGT: I presume your Dad lived in the house at some point, in which case you calculate the profit (sale price less purchase price) less costs in buying and selling. This is the chargeable gain. This is reduced by tapering relief depending how long he has owned the property. You then calculate the percentage of the reduced gain he has to pay tax on. This is the number of whole years he lived in it plus 3 years divided by the total time owed. So if he's owned it for 10 years, lived in it for 2, he doesn't pay tax on (3+2)/10 ie half the gain. You also get CGT exemption of £8,800.

Cara79

birdy1010 wrote:

thanks cara.

current house value - #182,000
salary - #33,000
no debts (#15,000 in an ISA)
unsure of redemption penalties at the moment.

Excellent, thanks for the above.

Would your dad be looking for the full £182,000? I would think if you have £15k savings, you'll obviously need some for solicitors costs etc, but I reckon you would be looking at 5 times your salary.

One of the mortgage guys will be along shortly who can tell you more about lenders and rates etc, but personally I think this would be do-able.

Have you thought about rates - e.g. fixed, variable, capped, tracker etc?

birdy1010

ok.

my dad bought the house off my brother (who lived here) 8 years ago as my brother's buyers fell through, so he done so to speed up the process of him moving. since then, he had a family living in the house until i chose to move in.

there is #70k left on the mortgage giving an equity of around #112,000.

birdy1010

cara,

haven't considered anything as of yet. just wondered on the next step. stay as is, or change ownership.

when i move on from here, i want to keep the house as a pension option, so it'll need to be in my name at some stage, be it when i move or (morbid, i know!!!) when my dad passes on!