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Buy to let - aged 75?
zannaleejandj
Posts: 4 Newbie
I have an erderly relative who is 75 years old and would like to buy a house to let. She owns her own property which she lives in ( no mortgage ) and she also owns another property which is being let (no mortgage). Could someone please advise me - Would she be able to get a mortgage? Or is she too old? And also if it is possible for her to do this, how would she go about it? I would be grateful of any help!
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Comments
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Would she be able to get a mortgage?
Many would say no but a few would oblige with a 10 year term at most.And also if it is possible for her to do this, how would she go about it?
A mortgaged buy to let is a high risk transaction. Is she ready to take on a high risk transaction like that at her stage of life. Especially as she is never likely to see a profit from it in her lifetime?I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
dunstonh wrote:Many would say no but a few would oblige with a 10 year term at most.
A mortgaged buy to let is a high risk transaction. Is she ready to take on a high risk transaction like that at her stage of life. Especially as she is never likely to see a profit from it in her lifetime?
Thank you for your reply to my question. My relative actually wanted to buy the house for myself and my family to rent. At the event of her death, all her property and assets go to my son. She is not expecting a profit for herself, but is thinking of my son's future. What are your views on this?0 -
lenders are even more fussy when the tenant is family.
The problem potentially are:
1 - can she afford the lending cost out of her income as the rent wont come close to covering it?
2 - can she afford to buy the property in 10 years when the lender wants their money back?
3 - on death, will her estate have any inheritance tax to pay and will the property need to be sold to pay the tax?
One option is perhaps not to borrow against the let property but consider equity release on her own property. Of course, that depends on the value of her property but it could help reduce IHT liability (although it would mean gifting you the money now and not receiving any income from it) and it would get round the problem of the lender not asking for the money back or any problems with family being the tenant.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
dunstonh wrote:lenders are even more fussy when the tenant is family.
The problem potentially are:
1 - can she afford the lending cost out of her income as the rent wont come close to covering it?
2 - can she afford to buy the property in 10 years when the lender wants their money back?
3 - on death, will her estate have any inheritance tax to pay and will the property need to be sold to pay the tax?
One option is perhaps not to borrow against the let property but consider equity release on her own property. Of course, that depends on the value of her property but it could help reduce IHT liability (although it would mean gifting you the money now and not receiving any income from it) and it would get round the problem of the lender not asking for the money back or any problems with family being the tenant.
Thanks again for your advice. I will speak to my relative on the valuable points you have made. Thank you.0
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