Obtaining a mortgage on behalf of my parents

boltonwanderer7

Hello,

My parents are in a bit of a situation. They currently live in a property which they have been renting from a family member who has now had this property repossessed after taking risks in the property market.
They are in their early 60's with no savings.
I have seen a 1 bedroom property for sale at £45,000 which myself and my husband could buy for them on their behalf with a mortgage and they could pay the mortgage payments.
Does anyone know if it would be possible for us to get a mortgage in order to go ahead with this? It wouldn't really be a buy-to-let mortgage as such as we wouldn't be in it to make a profit. Is there any other kind of mortgage we could get to do this?
Any information would be much appreciated.
Thanks..

ViolaLass

boltonwanderer7 wrote: »

It wouldn't really be a buy-to-let mortgage as such as we wouldn't be in it to make a profit.

Profit isn't relevant. You would be buying it and letting it to them.

Thrugelmir

boltonwanderer7 wrote: »

It wouldn't really be a buy-to-let mortgage as such as we wouldn't be in it to make a profit.

You would be renting out the property. So any profit would be deemed taxable.

holly_hobby

Definately a buy to let mortgage.

• You will need about 25% deposit
• The lender will want an AST (assured shorthold tenancy agreement) to be effected for each period of rental (which is generally 6 mths on an AST) - although I know this is your parents - this is to do with occupancy law and rights
• Your parents will in effect be paying you rent by paying the mortgage (as this is really payment in lieu or rent) - which means to remain within HMRC tax law - you should declare this as part of your annual assessment for tax purposes (costs that can be deducted are mortgage interest, maintenance costs, letting costs etc)
• Upon disposal or sale of the property you shall be subject to capital gains tax (CGT) on any gain realised on sale.

If the above is a viable option seek the assistance of a whole of market mortgage broker who will be to assist.

If the above isn't a viable option - have they contacted local housing associations/council with regards to emergency housing - as they are in effect to be made (not by their own actions) homeless.

Hope this helps

Holly

riverboat2001

I had a slightly similar situation, and went via a broker, i also told the absolute truth so no comeback later.

Basically i had a mortgage on a flat, and went on to buy a house.

I currently have two mortgages, Mum now lives in my flat rent free (i still pay the mortgage)
She had to sign a letter giving up all rights to stay there should i default and the bank seek repossesion.

And that's it, each bank, fully aware of the other mortgage, and that Mum lives in flat, and we live in the new house.

Mine, certainly isn't a buy to let, so i suggest you go and speak honestly to a mortgage broker and see how that goes.

PS, two banks are Halifax, and Santander.

holly_hobby

riverboat2001 wrote: »

I had a slightly similar situation, and went via a broker, i also told the absolute truth so no comeback later.

Basically i had a mortgage on a flat, and went on to buy a house.

I currently have two mortgages, Mum now lives in my flat rent free (i still pay the mortgage)
She had to sign a letter giving up all rights to stay there should i default and the bank seek repossesion.

And that's it, each bank, fully aware of the other mortgage, and that Mum lives in flat, and we live in the new house.

Mine, certainly isn't a buy to let, so i suggest you go and speak honestly to a mortgage broker and see how that goes.

PS, two banks are Halifax, and Santander.

Yes thats a valid point - but the OP's income would need to be sufficient to service both mortgages (as the 2nd lender will not take into account the fact that the parents will be paying the 2nd morgage). (I think we have all assumed that the OPs income isn't sufficient - which may not be the case).

Of course, if the OPs evidenced income & status is sufficient to service both mortgages (as the fact the parents (tenants) will be paying the mge is irrelevant to the lender) then it is entirely possible - with the parents signing a consent to vacate agreement.

Of course the OP will still need to declare the parents mge payments as rental income for tax purposes, and the rest of the comments made re CGT etc still apply.

Holly