Can I own a home without being on a mortgage?

DJLee

Hello All,

Does anyone the answer to this?

Me and my partner want to buy a house really soon (before the house prices sky rocket more then they already have). But the only prob is that we have a new-ish business so theres no way to get a mortgage ourselves, by the time the business is a year old and we sorted out the accounts (Jan 2014) the house prices would have gone up a fair bit due to the new wave of help to buy being rolled out.

Anyway to avoid this increase we want to know if one of our parents can take out a mortgage or a buy to let mortgage and have our names on the deed also, then once we have paid them enough to pay of the mortgage, can we then remove our parent from the deed and have ourselves as sole owners?

Is it as easy as that? Can our parent just hand over the ownership of the house to us once the mortgage is paid?

Thanks

Daniel

CKhalvashi

The mortgage provider will want the name on the deeds to match that on the mortgage.

The only way to do this, is either to stump up the cash yourselves, they stump up the cash for you, or a mixture of both.

The BTL route is the other to go down, however this will be based on their incomes and the rent, not yours.

CK

WellKnownSid

CKhalvashi wrote: »

The BTL route is the other to go down, however this will be based on their incomes and the rent, not yours.

I don't think an unregulated buy-to-let product would allow you to put a close family member in...

Thrugelmir

Don't get carried away with another property price boom. Help to Buy schemes are only temporary. Interest rates have yet to normalise so much uncertainty in the future.

As for your parents owning the property , all sorts of tax implications.

DJLee

Thrugelmir wrote: »

Don't get carried away with another property price boom. Help to Buy schemes are only temporary. Interest rates have yet to normalise so much uncertainty in the future.

As for your parents owning the property , all sorts of tax implications.

We've already noticed a big increase since the time we started looking at houses a few months ago, its also all over the news about house prices rising and its obvious they are only going to go up.

Could you also expand on the tax implications?

We are not too worried about interest rates unless they are stupidly high as we will be looking to pay of the mortgage as soon as we possibly can.

DJLee

CKhalvashi wrote: »

The mortgage provider will want the name on the deeds to match that on the mortgage.

The only way to do this, is either to stump up the cash yourselves, they stump up the cash for you, or a mixture of both.

The BTL route is the other to go down, however this will be based on their incomes and the rent, not yours.

CK

Could our names be added at a later date?

It would only be around £120 - £150 mortgage.

My dad owns his own home out right worth £400,000+

Would this make a difference.

CKhalvashi

DJLee wrote: »

Could our names be added at a later date?

It would only be around £120 - £150 mortgage.

My dad owns his own home out right worth £400,000+

Would this make a difference.

25% deposit, perfect credit rating, 125% of mortgage in rental payments, affordability criteria as the bank may decide, shorthold tenancy, and you must pay the rent each month.

You'd need to re-apply for a mortgage in your own name, when you can produce 3+ years accounts.

There's very little way around this now, and if your business was to fold/work heavily decrease, you'd be grateful for this.

CK

DJLee

CKhalvashi wrote: »

25% deposit, perfect credit rating, 125% of mortgage in rental payments, affordability criteria as the bank may decide, shorthold tenancy, and you must pay the rent each month.

You'd need to re-apply for a mortgage in your own name, when you can produce 3+ years accounts.

There's very little way around this now, and if your business was to fold/work heavily decrease, you'd be grateful for this.

CK

I may be being really dumb, but I dont understand your post.

We are looking at around £220,000-£230,000 maybe a bit more or maybe a bit less, and have £80,000 saved up.

CKhalvashi

DJLee wrote: »

I may be being really dumb, but I dont understand your post.

We are looking at around £220,000-£230,000 maybe a bit more or maybe a bit less, and have £80,000 saved up.

If that's the case, I'd advise speaking to a broker, who may not be able to get anything personally for you, but with that amount of cash in, as long as the business is stable, I can't see there being as much of an issue now, as I did before.

40% is a magic number in deposit terms, so bear this in mind.

CK

clippy_girl

could you look at a guarantor mortgage? coop do one which is what i have. house would be yours and mortgage in your name but mum or dad would guarantee the payments so if you default then they need to pay. if dad owns £400k house outright assume would be suitable

http://www.co-operativebank.co.uk/mortgages/parental-guarantor

Yorkie1

With less than 1 year's accounts on self-employment I suspect you may struggle to get a mortgage on your own account.

As CK has said, lenders generally don't allow people to be on the deeds but not on the mortgage.

If your parents took out a mortgage to buy the place, and accepted any payment from you towards it, they are LLs. This means:
- they would have to get a regulated BTL mortgage (fewer of these around than standard BTL mortgages) because of the tenants (you) being family
- they would need to abide by all the legal duties of LLs, including deposit protection (if applicable), gas safety certificate, declaring any income for tax reasons.

There may be other options such as the lend a hand mortgages, but you may find you stumble again given the recent history of self-employment.

If you want to pursue this then a broker is the way to go (not one attached to the EA).