Buy to Let Advice

Optimisticred

My dad has a property that he rents out on a buy to letinterest only mortgage but the mortgage ends next year.

As I will be moving back in to the area I have offered tomove into the property next year and rent it off my dad for 2 years and during thattime I will save up for a deposit and buy it off of him in 2016.

I think I know the answer to this question but because it iswithin the family is there any loop holes that would allow my dad to insteadhave a personal mortgage instead?

The reason I ask this is because the criteria has now changedand on renewal my dad would have to increase his equity (from 20% LTV to30%LTV)in the property thus taking out a large amount of his cash savings.

I cannot take a mortgage out myself because I have a defaulton my record (that falls off in 2016) thus I cant qualify for any mortgages.

Thoughts?

holly_hobby

There are in fact lenders whom will look at you with a 3 yr old default - in fact there may be some high st lenders depending upon how much the default was for and why it occurred - how succesful will depend upon the amount of deposit, and an otherwise pristine credit record .

BTL mortgages typicallly have a max age at redemption of 90 yrs of age, if the rental income is 125% of the mge interest, and there is at least 20% equity, there is certainly a home for this, with the property remaining on interest only and in Dads name - if it is NOT rented to you.

This is because if rented to a family member he will need a regulated BTL mortgage, which unlike a standard BTL mge, is actually based on the applicants (Dad's) income, and not rental receipts.

Speak to a whole of market mbroker, given other variable there are several solutions to this enquiry.

Hope this helps .. good luck

Holly x