Is my broker acting in my best interest?

jen_br

Hi,

We are looking to take a mortgage out -- FTB Here is our situation

Me- not form this country and SE so im not going on the mortgage

my Partner

and oru BIL


Now, my BIL and MIL are going to go on the mortgage BIL earns 22k a year my husband can't go on due to some negative credit which makes his score too low.

So MIL is giving us a deposit and she is around 65 yr old wealthy lady good pension

the broker told us since BIL earns 22k per year and MIL is a pensioner the best option for us is a buy to let. because his salary isn't enough for a normal mortgage and MIL all though owns her house outright doesn't fancy taking a mortgage out on it she rather give us cash.

But he said it doesn't matter what cash she has only her income counts therefore for BTL we only need to prove 25k earning and there is no way we can go for a straight up mortgage.


We are looking at a purchase of 220,000 with 50k down.

Does this make sense?>

ACG

It may be a way of getting what you want but its not the right way of doing it.

I dont understand BIL, MIL etc it makes the thing hard to read - sorry just a pet hate of mine that people on hear use all sorts of abbreviations i dont understand.

But from what i can gather, your trying to get 2 other people to buy a house for you and your husband?
Sounds like a bit of a nightmare situation.

Doing a BTL mortgage will probably be around the same price if not a little more than a standard mortgage but doing it other peoples names will make it a lot easier to place.

From a personal point of view, i wouldnt touch this case with a barge pole because im still quite new to advising so there would be a lot of work involved and i wouldnt want to risk being caught by doing it the way your broker is suggesting.

Perelandra

If I've understood this correctly,

The broker has suggested you apply for a BTL mortgage, so that the "affordability" check can take into account your 25K earnings and presumably the rent you'll be "receiving" from renting out the property you're buying (since it's BTL). Is this correct?

The obvious downside to this is that unless you're actually intending to rent it out, then there will be no actual income from renting it out...

This doesn't sound at all right to me.

Thrugelmir

jen_br wrote: »

We are looking at a purchase of 220,000 with 50k down.

On a £25k salary. A £150k BTL mortgage may well be considered a commercial risk.

jen_br

Sorry let me try again im useless at typing out what I mean.

We live in a rented private property the owners are going to sell this property At the moment Me husband and brother in law live here.

We love this house and want to buy it. With me being forigen and Self employed its a lot of hassle to get a mortgage - my husband doesn't qualify at the moment despite earning over 35k.

My brother in law who lives here nwo just got a job working away LOVES this house too and wants in on the deal. So him and Mother in law will buy this house and basically Hubby and I will pay the mortgage aka "rent"

Mother in law is fairly wealthy they spoke to her abotu taking a mortgage out on her house (which is paid off) but she doesn't want to do that rather give us 50k cash and go on the Buy to let mortgage.

I was told buy to let was the best mortgage to get because you only need to have 25k of income and Brother earns 22k and mom earns at LEAST 3k of pension plus assets

GMS

What rental income are you expecting the property to be assessed at?

jen_br

The landlords just had a survey done its valued at 290k with a rental income of 700.00 I have a copy of this from the survey people

The_J

Thrugelmir wrote: »

On a £25k salary. A £150k BTL mortgage may well be considered a commercial risk.

No. 90% of BTL lenders will be fine with this. From a commercial point of view income is seen to cover the odd void months and the rental is used to pay the mortgage interest.

What the OP is talking about is a regulated BTL although it is crossing over the realms of dodgy if the brother will be living in the property at any point.

Speak to a broker.

jen_br

Yes im with a broker this was his decision Brother has taken a job for 4 yr contract away from this address with accomdation provided he won't be registered here to vote, this again may change in 4-5 years but thats 5 yrs down the road

GMS

jen_br wrote: »

The landlords just had a survey done its valued at 290k with a rental income of 700.00 I have a copy of this from the survey people

Rental income sounds short.
170k at 5% would be this monthly on interest only and lenders have a stress test affordability figure. Usually the rent would need to be 125% of the mortgage.

Cant see it working on those numbers

jen_br

I think ebcause I live in the middle of the sticks LOL -- I don't know how accurate it was when the landlord got this done she was looking to re-mortgage I don't know if that makes a difference on the numbers given?