CSA Mortgage and Family loan agreement

creampuff

Hi

My husband NRP CSA1 and i are moving into our first home (no more renting!) i'm so excited i just want to jump up and down with joy! but... we are dreading the CSA

As the climate is incredibly hard at the moment to get a mortgage, family are lending us the money to put down the deposit.

Will the CSA take this into account as well as the mortgage as we have a legal agreement which has been set up by a solicitor?

any thoughts welcome.

Roy_G_Biv

It sounds like you are early rules. My feeling is the CSA will try to disregard the loan from the family member. You might want to consider offering the family lender a legal charge on the property proportionate to the amount loaned, and the repayments become rent.

Only good, provided the lender doesnt live in the property, otherwise the CSA will say you are 'non dependent'.

Not sure new the new CSA rules work, I think its a fixed % of relevant parents income

creampuff

it will just be hubby and i in the house so could be worth looking into it.

Thanks for replying, much appreciated

PlayingHardball

What do you mean when you ask if the CSA will take your mortgage and borrowing into account?

I believe they take housing costs into consideration, Kelloggs is the expert

Good luck with the house, exciting!

Fission

creampuff wrote: »

My husband NRP CSA1 and i are moving into our first home ... but... we are dreading the CSA ... family are lending us the money to put down the deposit. Will the CSA take this into account as well as the mortgage as we have a legal agreement which has been set up by a solicitor?
any thoughts welcome.

The answer is No. The deposit is by definition unsecured and unsecured loans to buy a house aren't listed in the list of eligible housing costs.

Kimitatsu

Fission is quite right, this is a non priority debt as it will not effect the house you live in - if you default you cannot be evicted, so therefore it will be disregarded.

Although they take the housing costs into account they will only take the mortgage payment, and they do ask for proof, so for future reference unless you are on a fixed rate then when the rates go up, you need to be reassessed each time.

You might want to consider offering the family lender a legal charge on the property proportionate to the amount loaned, and the repayments become rent.

You could only do this if the family member was either on the mortgage or had a consumer credit licence as effectively this would then be a secured loan, and then you would have to have a legal tennancy agreement.

Roy_G_Biv

Sorry Kimitatsu, that is not correct. No credit license needed. Rent is not interest.

Creampuff, Sample tenancy agreements available from clickdocs.com et-al, transfer part of property by filing a Form CH1 at the Land Registry making it secured. http://www1.landregistry.gov.uk/assets/library/documents/CH1.pdf

An alternative route is the popular part-buy part-rent method, just file a Form TP1 at HMLR to transfer part of your property as a tenant in common. You can transfer as much as you like, the higher the share, the higher the rent can be used to count towards housing costs.

If you prefer, any online licenced conveyancer can do it cheaply.

Either route puts the mockers on the CSA from pretending its not secured and trying to disregard it.

Afterwards, you can simply TP1 the property back to your name.

PlayingHardball

Roy_G_Biv wrote: »

Sorry Kimitatsu, that is not correct. No credit license needed. Rent is not interest.

Creampuff, Sample tenancy agreements available from clickdocs.com et-al, transfer part of property by filing a Form CH1 at the Land Registry making it secured. http://www1.landregistry.gov.uk/assets/library/documents/CH1.pdf

An alternative route is the popular part-buy part-rent method, just file a Form TP1 at HMLR to transfer part of your property as a tenant in common. You can transfer as much as you like, the higher the share, the higher the rent can be used to count towards housing costs.

If you prefer, any online licenced conveyancer can do it cheaply.

Either route puts the mockers on the CSA from pretending its not secured and trying to disregard it.

Afterwards, you can simply TP1 the property back to your name.

Hmmm...sounds dangerously like you are tryng to help NRP evade their financial obligations to their children. Sorry, in my mind the kids always come first. If creampuffs partner has children by other relationships, she should not be looking for ways to help them dodge his legal and moral responsibilities towards them. (I'm sure that is not what she was asking, but what the above poster has spun her questioning towards)

JSB43

Roy_G_Biv wrote: »

If you prefer, any online licenced conveyancer can do it cheaply.

This type of land transaction doesnt attract stamp duty, just telephone your local land registry office and they will help you complete the forms, then just turn up with the requested ID and file them.

The CSA doesnt need to to know the landlord/tenant are related and the CSA might surpise-telephone you to try and trip you up. Decline the security check saying the callers personal identity cannot be verified and end the call.

Kimitatsu

Roy_G_Biv wrote: »

Sorry Kimitatsu, that is not correct. No credit license needed. Rent is not interest.

Creampuff, Sample tenancy agreements available from clickdocs.com et-al, transfer part of property by filing a Form CH1 at the Land Registry making it secured. http://www1.landregistry.gov.uk/assets/library/documents/CH1.pdf

An alternative route is the popular part-buy part-rent method, just file a Form TP1 at HMLR to transfer part of your property as a tenant in common. You can transfer as much as you like, the higher the share, the higher the rent can be used to count towards housing costs.

If you prefer, any online licenced conveyancer can do it cheaply.

Either route puts the mockers on the CSA from pretending its not secured and trying to disregard it.

Afterwards, you can simply TP1 the property back to your name.

You miss the point though Roy - if it is a SECURED LOAN then it comes under the consumer credit act.......if you are offering a percentage of your property in return for a loan then you are effectively entering into that agreement for which a written statement of interest and charges should be given and is regulated by the OFT, who also issue consumer credit licences for just the above purpose.

All very well now but what happens if they take your "advice" and then several years down the road fall out with said family member and they suddenly find that they have to pay back interest etc becuase they have a charging order on the property.

Roy I have deleted threads and the forum team has deleted posts by you which deliberately encourage people to enter into fraudulent transactions, if you cannot give good advice then please refrain from giving it at all. There is a wealth of information and knowledge on this forum, but none of us would advise underhand dealings in order to stop liability (and that goes for NRP's too) but we also do advise both sides of the loopholes in the law.

JSB43

creampuff wrote: »

As the climate is incredibly hard at the moment to get a mortgage, family are lending us the money to put down the deposit.

Kimitatsu wrote:

if it is a SECURED LOAN then it comes under the consumer credit act

No offence, who said anything about charging "interest" and I see nothing that is remotely "fraudulent".

A homneowner has a right to dispose of his property and borrow against it.

Unless you are adqeuately qualified to make such amendments to NRP advice relating to Property Law, why dont you let the OP decide for themselves?