1st time buyers, parents on mortgage or anyway round?

Leanne8t3

Hiya, this is my 1st time so please bare with me....

my husband an I are getting really frustrated with not being able to get on the property ladder. Renting is just throwing the same amound of money away each month that a mortgage would cost us!! my question is this, would my dad (who's 69 and owns his own house outright) be able to get a second property for us to rent? and if so what would it involve? that way we could be paying him rent to live in the house and after a few years he could sell it and give us the equity or a % of the equity we had put into the house through renting, or we could do a shared ownership with him and buy a % share and still rent the rest...

firstly, is he too old to get a mortgage? secondly, would he end up paying anything or having to physically take money from his house to put into a second home, or is it just used 'theoretically' or on paper. i know these questions probably seem pretty daft to some of you but any help would be greatly appreciated in the matter. we have looked into shared ownerships but still would need a £12k+ deposit which we simply do not have and can not get, and there seem to be no schemes in our area that help first time buyers, so unless we move 30+ miles which would meet changing the kids schools, work and everything else it just seems impossible.
Thanks
Leanne

holly_hobby

There are many problems with your suggestions re Dad effectively buying for you, you renting etc .. etc... as in the first place under a Buy to Let mge (which may not have max age restrictions) there is a minimum deposit of 20%. (further complicated by renting to a family member will affect the regulated status of the mge and availability). Releasing capital from his own property will be based on his affodability and his age (without entering into the realms of lifetime mortgages/home reversion schemes), so there are complications everywhere really in this enquiry.

Not sure where you are located, if in the Midlands, or you or family are a member of Tipton & Coseley B Society - I think the simpliest solution to consider (if you have discussed with Dad and he is willing to assist), would be one of their new 100% family mortgage schemes, whereby a charge is secured against a family members property (and removed when the LTV reduces to 75%).

Of course this is subject to your own status and affordability, but it may be a simplier route.

Hope this helps

Holly

shahgee

100% mortgage from Aldermore is also announced but they take 25% equity from parent's property & charge a huge 6% interest. BEST ROUTE FOR YOU will be to talk to a an independent whole of the market mortgage broker like me who can assess your situation & inspirations & work pout the best deal possible for you tailoring yourself. Remember that having no deposit but with willing parents is a blessing in disguise. Age is a restrictive barrier but not that much.

holly_hobby

Bit more relevant info on the Aldermore deal mentioned by Shaghee.

The interest rate is not 6%, but actually 6.48% on a 3 year fixed.

Charge for 25% of the property value secured on the guarantors (Dad's) property.

Available on repayment basis only.

It is not widely available through all whole of market brokers(as suggested), but only currently being piloted through 3 channels: - Connells Group, Arun Estates and 3mc, but is available to potential homebuyers throughout England and Wales (unlike Tipton which has geographical or applicant restrictions), with a max loan of £250,000 (£250k).

Minimum age of borrower is 25.

There are currenty only 2 other 100% lenders available in the UK - as already discussed Tipton BS who are not availabe via brokers (intermediary), with a current svr of 4.99% on the product and a 0.1 discount available up to 31.10. 2013 reducing the headline rate to 4.89%), and Marsden BS - Marsden was not mentioned in my original post, as it requires capital deposited in a linked offset account, which reverts back to Dad having to remortgage to release capital to deposit, which as stated may be an issue with source of income/affordability, max term and his age).

Hope this helps

Holly

Thrugelmir

shahgee wrote: »

Remember that having no deposit but with willing parents is a blessing in disguise.

Only on a case by case basis. Poor lending decisions in the past 10 years have created many of the problems people are facing today. The risk and downside has to be fully understood. Not glossed over as is to often the case.

Lucaskane

My perspective as an Underwriter, this is not possible. The mortgage would be assessed on your Father's merits, and most lenders have a max age restriction. My lender for example it's 75, and as your Father would be the named person on the mortgage, it would be assessed on him and not yourselves in the property.

msween

Well 100% mortgages may be good for those who want to get on the property ladder as soon as possible but are struggling to make it onto the property are struggling to save. Companies like Arun estates are offering them and so are Pittis who are promoting them to first time buyers, link below ptts.co/rpjSCd

Thrugelmir

msween wrote: »

Well 100% mortgages may be good for those who want to get on the property ladder as soon as possible but are struggling to make it onto the property are struggling to save. Companies like Arun estates are offering them and so are Pittis who are promoting them to first time buyers, link below ptts.co/rpjSCd

Would you happen to work for Arun Estates?

DVardysShadow

msween wrote: »

Well 100% mortgages may be good for those who want to get on the property ladder as soon as possible but are struggling to make it onto the property are struggling to save. Companies like **** estates are offering them and so are ***** who are promoting them to first time buyers, link below ****.co/*****

100% mortgages are particularly good for people who would relish being in negative equity and whose inability to save would keep them there.

Upsey_Daisy

DVardysShadow wrote: »

100% mortgages are particularly good for people who would relish being in negative equity and whose inability to save would keep them there.

*rolls eyes* :silenced:

Conrad

Plenty of parents buy a buy to let and dont state who the tenant will be afterall few landlords would know this as they do not seek a tenant until after completion.

There are sevral buy to let lenders that could consider the deal on competetive terms.