Trying to save Mum's house - BTL? Buy it? Help!

Bracken_25

Hi all,

A newbie to the forum from a posting point of view but have found many successful answers on here and saved a fortune, not to mention reclaimed one too! So I am hoping you guys will be able to help me with something that is taking over my life at the moment.

Here's the scenario:

I am without a mortgage but in a position to borrow up to £180,000 and have around £12k in savings, I could gather another £5k by selling my weekend car.

My Mum's mortgage is coming to an end in August 2013 as she is 65 and the remaining balance is £125k. The house has been valued and has received offers of £210k when put on the market a few months ago. There is nothing odd about it, i.e. standard construction, freehold etc etc. The mortgage is in both parents names, although all the beneficial interest was passed to my Mum as a result of their divorce some 12 years ago. The mortgage is with Birmingham Midshires who will not remove my father as my Mum's earnings are too low (£400 p/m + Pension)

Mum doesn't want to sell it as it needs some work and a developer will go in, spend £10k and make £30k in 3-4 months. She would rather I had it. I have a brother who is not in a position to mortgage or contribute toward the renovations, he does not live locally so he is out of the picture.

I am currently in rented accomodation which is for sale and I fear may be sold very soon so this has really shot up the agenda. My initial thoughts are as follows:

Buy the house as a BTL with Mum passing me the deposit from the sale proceeds. Can this be done? I would estimate a purchase price of £170k with a £45K gifted deposit to bring the LTV into line. She could then continue to live in it and pay me rent as such.

Buy the house as a residential and again take a gifted deposit with a purchase price of say £140k to clear the mortgage and keep the monthly repayments low. Obviously we have the issue of buying below market value, CGT and me living / not living there.

I really need some good advice on this and I am sure there are many families in the same boat. Your help would be greatly appreciated.

kingstreet

This appears broadly similar;-

https://forums.moneysavingexpert.com/discussion/4576725

Bracken_25

Thanks kingstreet, that thread was a little helpful but was a bit after the fact of my position. It would appear making the lender aware my Mum will be living in it may not force me into a BTL, which would be better in the long run, but will this impact my ability to get on with my own life as my on going mortgage plans will be hampered by the fact I already have a residential mortage?