First time buyer or not?

ANGLICANPAT

Hi, Id be very grateful if anyone has the answers to the following.
Id just like an idea of whats likely before approaching a broker.

Scenario - a person buys a property in their own name for cash , then a partner (ie unmarried) later moves in , and then after 4 years they want to buy (with mortgage ) a family house together in a different area and leave the cash bought one rented out

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1) If buying jointly, could they still take advantage of any 'first time buyer' mortgage offers ? Or would they no longer be considered first time buyers because one partner in the commonlaw relationship had previously already made a purchase?

2) If buying jointly, would the rent from the already owned house be taken into consideration during the assessment of what mortgage they could have , as well as their salaries ?

3) If the new purchase was put soley in the name of the partner who hadnt already bought a house, but the mortgage was going to be paid between them - would only the salary/income of the person named as owner of the new house, be taken into consideration , or could the mortgage company still count income from both partners (such as the rent from present house )

Thanks for any input.

kingstreet

1) Depends on the lender. Some will give you a FTB offer if you haven't had a recent mortgage. TBH you'll get just as good a deal either way. FTB deals aren't too different from others.

2) Probably. If no mortgage, the lender may well take it into account. Check at the time.

3) Your income is only taken into account if you are a party to the mortgage and the purchase.

ANGLICANPAT

Thank you Kingstreet. This may sound an ignorant question, but the whole scene is cloudy to me at the moment.

a) Regarding your answer to No 3 , is it impossible to be party to the mortgage in the case where a commonlaw couple are going to be paying the mortgage between them,(and have contributed equally to the dep) but have chosen for various reasons, including tax reasons ( thinking of cgt for instance on selling one of props) to have only one name on the ownership deeds?

b) Do you rate the new HSBC 10% dep mortgage as good as it seems or do you think now 10%'s are coming back in ,that other lenders will follow and better it over the next few months?

kingstreet

ANGLICANPAT wrote: »

a) Regarding your answer to No 3 , is it impossible to be party to the mortgage in the case where a commonlaw couple are going to be paying the mortgage between them,(and have contributed equally to the dep) but have chosen for various reasons, including tax reasons ( thinking of cgt for instance on selling one of props) to have only one name on the ownership deeds?

It's funny you should mention HSBC. They will permit a borrower to be on the mortgage, but not on the deeds.

You mention CGT, but there are various reliefs and mechanisms to reduce or mitigate any liability. You have the three year rule on changing your principal private residence and not forgetting you actually have to make a gain - in the current market that's not a forgone conclusion. Annual gains allowance of £10k per person too.

Still, if you want to be party to a mortgage and not the ownership it is possible.

b) Do you rate the new HSBC 10% dep mortgage as good as it seems or do you think now 10%'s are coming back in ,that other lenders will follow and better it over the next few months?

I can't say. Sorry. If the HSBC deal is the best option for you at the moment, apply for it. If you aren't ready now, look at the market when you are.