Mum and Dad new house advice please.

truhart

Please could you tell me of a Mortgage product with an interest only payment and a LTV of 80%
Here is the rub.
I would like to purchase a House for £245k My Mum and Dad will be moving in with me, as my Dad has been diagnosed with cancer and my mother’s mobility is not what it used to be.
Basically they are going to sell their house which would leave £50k to place as a deposit on this new house. Therefore I need a mortgage of £195k say 79%.
However I already have a mortgage myself and would like to just rent mine out to cover my existing mortgage and go toward some of the new monthly payment.
Cashflow on a month to month basis is not a problem and the figures do add up.(In fact if I rented mine out I will be better off per month)
Would I be able to get this 2nd mortgage and if so does anyone know of a company doing this.
(Stamp duty, fees are not really an issue).
Would really be grateful if any of you experts out there could suggest something.
Cheers
Tru
x

Senior_Paper_Monitor

To go interest only you will need to show a repayment vehicle - and in most cases this is limited to 75%.

You don't give any figures for the current property so impossible to comment on this or its use to generate the extra capital that may be needed.

Frankly this is potentially quite complicated and I would recommend speaking with a broker/adviser to help with best arrangements.

truhart

Yep

sorry my mistake.

Are there any experienced Brokers / FSA able to comment please.

In fact if they have a solution , they can have the business...

There is no more available 'capital' from my property. Worth £170k, mortgage £120k

Cheers

Caz3121

From the numbers on your current place you should be ok for renting provided the rental income is 120%(?) of the mortgage interest. You will need either consent to let or move to a BTL rate.
Will your income support a mortgage of £195k

GMS

If you are planning to rent your own property then if you cant get Consent to Let you will need to arrange a Buy to Let mortgage. As part of the Buy to Let you may be able to raise some funds in order to bring the LTV for the new purchase down to the 75% required for Interest Only.

Another issue could be the fact that your parents will be gifting deposit, having no interest in the property but residing there. Be careful with this and make sure a lender is aware of the scenario.

Rental income would need to stack up for a Buy to Let and your own income would need to be sufficient for the new purchase.

Senior_Paper_Monitor

I already have made as much comment as possible without full disclosure of detailed circumstances - and the FSA don't give advice

There may be some capital possible from the current property (but this may not be practical for cost/affordability reasons).

The repayment vehicle for interest only appears to be the main issue (and one you have provided no information on) and will be the first thing for any broker/adviser to establish - together with details of income etc. The gifted deposit from someone who is to be resident (and possibly issues of potential deprivation) needs to be considered carefully.

NO 'solution' can be guessed without full disclosure and evaluation by a broker/adviser - it may be doable, certainly won't be easy if the basic figures are the whole story, and may not be possible. Most brokers will happily work with you, without an initial fee to establish what can or can't be done.

Senior_Paper_Monitor

Snap Mr GMS (for the second time today)

truhart

Thanks guys food for thought. Looks like it will be very difficult.

One other thought out of the box, could all 4 of us 'buy' the new house on a mortgage so that 2 Salary's and 2 pensions are taken into account for the 'ability to pay the monthly payment' etc.

Sorry for the newbie questions I'm out of my depth in this area.

Once again

Thank you

Senior_Paper_Monitor

Then maximum age becomes an issue - I can only repeat my recommendation to talk through it in full detail with a mortgage broker, its what we do for a living !