Is my broker acting in my best interest?

jen_br

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This si what it said when the landlord got it surveyed.

betmunch

Just looks to me like MIL, and possibly BIL is getting a regulated BTL, theres no issue here.

Of course you realise you wont own the house, you will just be tenants of your MIL?

Also, if the rental income doesnt stack up then its going no where so make sure your not paying you broker until completion

Conrad

A family member occupying a B2L property makes it become a regulated residential mortgage. I suspect therefore this would be breaking rules.

Be careful on any buildings insurance policy wording. Some B2L insurances stipulate 'no family members may be tenants'.

jen_br

Thank you very much appreciate your advice I shall ask the broker for more info

holly_hobby

If the brother (as a mortgagor) resides in the property at any point, it turns the BTL into residential lending, and the lender is advised/becomes aware, they will accordingly move them onto a residential product (subject to status checks).

The property being "let" to OP and Partner turns the BTL from unregulated to regulated lending (as more than 40% is occupied by a family member) - BUT there are BTL lenders that wil permit this arrangement (subject to standard full income verification, which may scupper the issue somewhat !).

If they purchase under a BTL and don't advise of the let to a family member, then technically Mum and Brother are in breach of the mge t&c's, with the lender probably requesting immediate redemption due to the contractual breach. Rental income & tenancy agreements have to stack up too

Mum and Bro, will also have to submit an annual SA to HMRC in relation to the recd rent (which I believe is to be equal to the mortgage repayments), whether it equates to a tax liability or not, and if this is a repayment mortgage only the mge interest may be offset, so possible exposure on the surplus (unless other permitted deductions are applied to mitigate any liability).

However, having suggested this route, I would expect the broker to be aware of and fully discussing all of the above.

Holly

jen_br

Holly he has not said all that to be honest with you.... interesting to read that.

Is there a way a normal mortgage could be obtained with 220k 50k down mom has a house she has lots of cash pension moneys etc etc

holly_hobby

Mum's age would result in a restrictive term for a residential mortgage, further to which all her sources of income may not be accepted by a lender either ...

To be honest, I don't think its fair on Mum to ask her to take on such a huge liability at her age ... as she will be legally responsible for paying the mge, even if you haven't that months mge payment to give her ... I think its a lot to ask

My honest opinion is that this is fraut with issues and problems from top to bottom (inc a broker who is throwing round ideas apparently without a clue or care of the mechanics of what he is saying).

The issue is you can't afford to purchase the property under your own steam, with your self employement and your Hubbys adverse credit .... and to do so is involving 3rd parties, where you still will only be a tenant ...

Stick to renting until your financial situ is more stable, if Mum still gifts you the 50k for a deposit happy days, at least you won't have the financial mountain most other FTBs are struggling to reach 1st base on.

Hope this helps ... if not exactly what you wanted to hear ..

Holly x

jen_br

Thanks for your honesty, I know my hubbys credit improves in sept it all falls off so we will just hold out and await the gift from mum.

Mum wants to help because she can and i guess she just has a lot of money sitting there waiting for her to do something with might as well enjoy it whilst shes alive

jen_br

I think for us the frustration is that we earn good money but due to some past history it screws us over.. cest le vie i guess just annoying lol

Millie_Millsters

ACG wrote: »

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.

Doing a BTL mortgage ... <snipped>

Pot, meet Kettle :rotfl: