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Parents selling house & want me to buy them new one with a mortgage
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Interest only on a residential mortgage is a no goer in any event. They are as rare as hens teeth now. Only folks who have them now are those who got them prior to mortgage lenders coming to their senses about more responsible lending.0
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Can they not buy a cheaper place outright say £150K and have £50K in the bank rather than £100K...they wouldn't have to pay rent/mortgage either....EVER
Gotta be the best way to do this."Dream World" by The B Sharps....describes a lot of the posts in the Loans and Mortgage sections !!!0 -
I'm not sure I would be a "Landlord" anyway. It won't be a buy-to-let mortgage it will effectively be a second home that I allow my parents to live in.
You will be a landlord in the circumstances you describe, and it ought to be a buy-to-let mortgage. You're right to say that BTLs don't generally allow you to move your family in, but that's because the BTL mortgages you have now are (presumably) unregulated buy-to-let mortgages.
Regulated buy-to-let mortgages do exists, and they are for people wanting to let their properties to close family members.
I still think the £100k deposit from your parents is going to be an insurmountable problem. You keep calling it a gift, but it really isn't. If they were giving you a "gift without reservation" then you'd be able to spend it all on wine women and song if you wanted - but they're not doing that, they're asking you to spend the money on a house for them. Even if you told the bank this really was a gift without reservation, and you were just choosing to spend it on a house, I don't think the bank would believe you.
Could you get a joint mortgage, with all three of you named? That would get rid of the gifted deposit problem, but it would cause a whole bundle of new issues.
It might be worth a chat with a broker. Given the deposit your parents have, and the fact your income is so high you're not bothered about being liable for £100k more debt, I suspect a solution might well exist.0 -
If I am able to persuade the mortgage company to lend me the money then it will be interest only.
If I have to charge my parents rent it will be to the value of the interest - I therefore will not be making a profit and will have no tax to pay. As a landlord I only pay tax on profit from the income and there won't be any.
You are still obliged to submit a tax return to HMRC, even if no tax is due. In fact, it is only by submitting a tax return that you provide them with the evidence that no tax is due.0 -
You are still obliged to submit a tax return to HMRC, even if no tax is due. In fact, it is only by submitting a tax return that you provide them with the evidence that no tax is due.
Also the rent has to be at least 25% more than the mortgage payment for the lender to either give consent to let or for a BTL to be offered. If you only collect say 50% of the rentable value then the HMRC may ask questions and charge you income tax on the proper rental rate."Dream World" by The B Sharps....describes a lot of the posts in the Loans and Mortgage sections !!!0 -
You should also consider deprivation of assets. What would happen if they needed to go into a care home?0
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If you are going to do this, then make sure your buildings insurance company knows exactly what you are doing.
Think the lender will see exactly what is happening, it won't happen."Dream World" by The B Sharps....describes a lot of the posts in the Loans and Mortgage sections !!!0 -
Foxy-Stoat wrote: »Think the lender will see exactly what is happening, it won't happen.
I suspect you are correct, but you never know.
The last thing the OP wants is to end up with a property they are paying to insure, only to find the insurance may not be valid if it burns down because their situation is non-standard.0 -
You are still obliged to submit a tax return to HMRC, even if no tax is due. In fact, it is only by submitting a tax return that you provide them with the evidence that no tax is due.
That's fine. I already have 2 buy-to-lets so although my main income is PAYE I still have to do self-assessment tax returns. So no great hardship.0
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