Buy-To-Lets for Parents

Kev-Bol

I currently have a joint mortgage with my fiancee and are looking into providing the mortgage for her parents. As the are both over 60 they can't get a mortgage, so we have offered to share the deposit and then pay part of the mortgage, with them giving us some 'rent.'
Do we need to get a buy-to-let mortgage, or is there another option we have missed? The buy-to-lets are obviously making this very expensive, especially for the initial fee.

Senior_Paper_Monitor

Will probably have to be a buy to let to meet affordability - only a limited numbe rof BTL lenders permit let to family (and not normally used that way round).

Probably do-able (dependent on all the normal issues) but will need to be carefully researched/placed for acceptance.

Cazza

Their age will not preclude them from getting a mortgage, whether it is advisable or not is another matter!

With regards to Buy to Let mortgages, you will not find that many lenders will be prepared to lend in this situation - most will have conditions which prevent you letting the property to a family member. Usual practice would be for it to be a normal residential mortgage product, with the lender aware that this is a second property for full time occupation by your in laws. Any borrowing permitted would be based on your incomes and would take into account any existing debts you have, including mortages.

I'd suggest a trip to a good mortgage broker is a good idea, it's definitely possible and a good broker will be able to let you know very quickly which lenders they would approach.

Conrad

Buy to let for older people is very common business for me now. It should'nt be an issue IF CORRECTLY FRAMED and the max term is to age 90.

Be aware some lenders will confuse you. You might initialy apply for B2L but later they will say you do not qualify as your parnets are not established landlords, and then will instead offer you thier LET TO BUY range.

Also be aware that the buildings insurance must match the occupancy status - a point often missed that can cost you millions if the place burns down and kills a neighbour.

Kev-Bol

Thanks for the info, our initial mortgage was taken out when we had relatively small salaries, so we could actually afford the existing mortgage on a single salary now, and then look at getting another mortgage on a single salary. Is that feasible, or would it make no difference?

betmunch

Conrad, OP's parents dont want a BTL, OP wants BTL to put his parents in.

Being over 60 wont exclude them from getting a mortgage so this avenue should be looked at.

If you need to take out a mortgage for a dependant relative this could also work.

You need to speak to a good broker and they will come up with a solution for you.

Kev-Bol

thanks betmunch. Think that's the next step, just want to go 'armed' with some information and obviously the banks don't want to share...

Thrugelmir

Kev-Bol wrote: »

just want to go 'armed' with some information and obviously the banks don't want to share...

Share what information?

Senior_Paper_Monitor

Banks ! Very limited choice of BTL range at any given bank (and each will have a single 'family member rule' across what little range they have - many (best?) BTL deals only available via brokers.

Bear in mind that any BTL puchased directly from lender will almost certainly be 'unadvised'.

If your concern is the bank will know more about the rules than you (from your comment #7) then consider using an independent/whole of market (or whatever the FSA want us called next week) broker/adviser - if you go to a regulated adviser (rather than a non regulated commercial loan arranger) they will almost certainly 1) treat any buy to let through a full advice process 2) consider any non buy to let options that may prove to be available.

Thrugelmir

Senior_Paper_Monitor wrote: »

Bear in mind that any BTL puchased directly from lender will almost certainly be 'unadvised'.

Are the rules changing for BTL ( unregulated commercial lending) ?

Senior_Paper_Monitor

Every indication is they will change within and/or around MMR, but as no set date (for anything within it) and OP is heading off to the bank possibly in the imminent future I think the warning is valid.

Even if regulated, it can still be (and in my opinion probably would be) unadvised from the bank (as FSA are apparently not bringing compulsary advice in under MMR).