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Buy to Let Question
abbiekeira
Posts: 12 Forumite
Hello,
If I wanted to purchase my parents house from them at a discounted rate on a buy to let mortgage could I use the equaity as a deposit?
Basically their house is valued at £115,000 and they are going to give it to me for £80,000.
Could I use the £35,000 equaity as the deposit or would I need to use actual cash as the deposit?
Many thanks.
If I wanted to purchase my parents house from them at a discounted rate on a buy to let mortgage could I use the equaity as a deposit?
Basically their house is valued at £115,000 and they are going to give it to me for £80,000.
Could I use the £35,000 equaity as the deposit or would I need to use actual cash as the deposit?
Many thanks.
0
Comments
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You really need proper legal advice for this one, its full of pitfalls buying at discount from family.make the most of it, we are only here for the weekend.
and we will never, ever return.0 -
Speak to an independant financial advisor and/or your chosen mortgae provider.
My guess is that provided thir valuation comes in at £115K, and the amount you wish to borrow meets their LTV criteria, they will be happey.
Beware of Stamp Duty which may be charged at £115 - speak to a solicitor.
Other issues might be: Inheritance Tax on this 'gift'; and issues around your parents entitlement to care costs if they required it in the future) since the council could consider this a mechanism for them to reduce their assets in order to claim benefits.0 -
Thanks for the above.
If my wife was to buy it in her name would that make it easier?0 -
Forget the mortgage for a minute.
You need to get advice on buying it cheaper than market rate. Could be trouble ahead as this could be seen as deprivation of assets.0 -
Joint, always joint and tennants in common (google it)make the most of it, we are only here for the weekend.
and we will never, ever return.0 -
abbiekeira wrote: »Thanks for the above.
If my wife was to buy it in her name would that make it easier?
Errrrr.....
My guess is that provided their valuation comes in at £115K, and the amount you wish to borrow meets their LTV criteria, they will be happy.
Beware of Stamp Duty which may be charged at £115 - speak to a solicitor.
Other issues might be: Inheritance Tax on this 'gift'; and issues around your parents entitlement to care costs if they required it in the future) since the council could consider this a mechanism for them to reduce their assets in order to claim benefits.0 -
Now you know what you are proposing is a fiddle, is not correct,is not sticking by the rules & regulations.
Would you be happy if your eventual Tenants then decided to approach their letting contract in the same way after they moved in, deciding to fiddle & not stick to the rules & regulations???
Thought not...0
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