Can my Father in-law buy a house for me?

SDONOVAN82

As it says on the tin really!!

Me and my partner have 2 children and have been renting privately for a number of years and have always thought of buying our own place as a longshot, but my father in law who is mortgage free and has a nice amount of savings tucked away suggested that we do a Springboard Mortgage through Barclays.

Unfortunately although not terrible my credit score wasn't up to Barclays standard so it didn't happen, so my question is - Can my father in law get a mortgage and buy a house (all in his name obviously) and me and my family live in the property until our credit scores are good enough for us to get our own mortgage to buy the property from him?

It sounds very simple but I'm assuming as with anything too simple there are restrictions or things we need to look out for?

Thanks in advance

Shaun

kingstreet

I can't think of anything wrong with that.

A second property for family occupation is pretty straightforward. He'll probably need a bigger deposit, perhaps 15% or 20% for a second property with some lenders.

Dave_Ham

Add in, depending upon his age (and likely expectation interest only will not be available on a residential purpose) you may also want to consider a buy to let mortgage (in his name)

This will likely to be on interest only and less age/income sensitive, although a bigger deposit will be required (circa 20-25%)

If Father In Law is under 50 and still working, the ressie option is likely to be better although take formal advice with the full facts to hand.

Good luck

SDONOVAN82

That's great thanks for your advice

bigadaj

Dave_Ham wrote: »

Add in, depending upon his age (and likely expectation interest only will not be available on a residential purpose) you may also want to consider a buy to let mortgage (in his name)

This will likely to be on interest only and less age/income sensitive, although a bigger deposit will be required (circa 20-25%)

If Father In Law is under 50 and still working, the ressie option is likely to be better although take formal advice with the full facts to hand.

Good luck

Would there not be a problem with renting to family, I thought this was an issue with many lenders for buy to let?

holly_hobby

Yep.

He'd need to obtain a regulated buy to let mortgage, which is typically assessed under 2nd property regs (ie affordability is income based rather than on rental receipts as with an unregulated BTL arrangement), and as regulated, whether they'd permit IO with out a repayment vehicle will be down to the lender and their view of the arrangement.

Hope this helps

Holly

Dave_Ham

bigadaj wrote: »

Would there not be a problem with renting to family, I thought this was an issue with many lenders for buy to let?

Used to be a bigger issue than now, as Holly correctly confirms it just means it is regulated and there are sensibly priced lenders that will accept this situation.