Mortgages For Parents Buying For Children

thomaswbooth

Hi.

I wondered if anyone could help with this:

Myself and my partner are currently uncreditworthy, especially for a mortgage.

My parents have offered, very kindly, to help us out by loaning us a sum of money (around 30%) as a deposit and to take out a mortgage on the remaining 70%.

The money that they have and are able to use for the deposit is not huge and isn't currently making anything in the account it has been sat in. We will pay them interest on this, guaranteeing them an income from the money now locked up in the property.

We would then pay the mortgage on top of this which would not be large either.

My question is this:

When applying for such a mortgage, will they need to apply for a Buy-to-Let mortgage or something else? While we have no commercial agreement, would we be classed as paying them rent? Having done some looking around, may Buy-to-Let products advise that a rental income of 125% of the yearly mortgage repayments is required?

Alternatively, would applying for another mortgage that is not seen as a Buy-to-Let, been seen as something fraudulent if we were paying the monthly mortgage repayments?

I hope this makes some sense...

Thank you