buying rented house/legally owning help

ballyclover

Hi

I have moved this from another thread as i think this thread is more in common with the answers i seek


hi

am looking for some quick basic advice. A relative purchased house before emergrating to Australia. The idea was i couldnt get a mortgage and they wanted to invest in property for retirment, pre crash of course. The plan was when i was able i would purchase the house from them for the market price.

The whole plan has gone wrong, they returned early,moved down south leaving me to continue to rent the house. Unfortunatlay the properity is in negitive equity despite thier intial £10,000 deposit.

They cannot get a mortgage where they are now because they need to sell my house to get a deposit back to buy a home of there own. They have no desire to live in my house.

The associated costs of this house is also crippling them and they cannot afford to contribute towards repairs.I have renovated the home as was agreed when they left, as as i explained the intention was for me to buy it.

I cannot get a mortgage, i have no deposit and have several defaults on my credit file. We have a household income of around £40000. Is there a way, legally for me take ownership. I am aware that the mortgage company actually own the house anyway.could i draw up a document giving me the house as long as i repay the mortgage.its very complicated, but my relative would be happy for me to take on the house and lose thier deposit, as it free up extra money for them.

i recently read about a guy who sold his home to someone by ways of repayments, with no loan, mortgage or rental agreement needed...not sure hoe that worked..

I am sure there must be an easy solutuion to both problems.

for information, the house was purchased for a morgage of £120.000, having had it recently valued it came in at £105,000. if they sold it they could not afford to be stuck with the £15.000 owning

i aprrecaite any thoughts as i desperatly want to remain in this house for my family, and love doing it up, and want to do more

kingstreet

Far from achieving this;-

they need to sell my house to get a deposit back to buy a home of there own

they will end up having to find the negative equity to be able to sell.

If there is no equity in the property, they aren't going to get a deposit from it in any way, shape or form.

From your point of view, all you can do is purchase the property from them. To do that, you'll need a deposit and a mortgage like anyone else. Then they'll need the £15k on top to pay off their mortgage, otherwise the sale won't be able to proceed.

Frankly, doing nothing appears to be the best option for the time being. Provided they have sufficient income, they should be able to purchase a new home with the buy to let "in the background" as long as they have their own deposit, of course.

Notmyrealname

ballyclover wrote: »

I cannot get a mortgage, i have no deposit and have several defaults on my credit file. We have a household income of around £40000. Is there a way, legally for me take ownership. I am aware that the mortgage company actually own the house anyway.could i draw up a document giving me the house as long as i repay the mortgage.its very complicated, but my relative would be happy for me to take on the house and lose thier deposit, as it free up extra money for them.

Not a chance. Anything has to be done with the agreement of the mortgage company and you have a bad credit record so they won't entertain it. The only way would be if you can find the money to purchase the house.

As an aside, if you are renting from them then they are landlords with all the legal responsibilities in regards to repairs and gas safety checks etc. Do they even have permission to let the house out from their mortgage company?

Their only option is to change the mortgage to a commercial letting one however they would only get a 75% LTV at best and the rent needs to be at least 125% of the monthly mortgage interest payment. That means they are then free to get a private mortgage on a new house.

ballyclover

they have permission to rent and i am paying the correct rental amount as required.

It would appear that they cannot sell the house even if they wanted too becuase they would owe more than the selling price would generate i guess, best bet is to sit tight and hope i can sort something in next couple of years

G_M

The only way you could buy it is if you can do so without a mortgage. Cash. Since you have a dodgy credit record.

The only way they could sell it is if they can find the difference between the selling price they'll receive and the mortgage amount they owe. Cash. Since they are in negative equity.

In the meantime you have two options.
1) treat them as landlords. Insist on repairs being done, gas inspections and other H&S matters being complied with, etc. It's a business arangement.

2) treat them as mates and 'overlook' the formalities (hoping you don't get carbon monoxide poisoning etc) and hope 5 years alters the situation.

I hesitate to ask if they are paying tax on the rent they receive from you......

or whether their insurance is valid.......

BitterAndTwisted

Another possible scenario is that they evict you, as is their right, and get another tenant in who can afford to pay more rent.

Meanwhile get your finances in order and save up your own deposit for your own house. The one you currently occupy is no more yours than it is mine.....

ballyclover

ok, thanks everyone