What mortgage options do I have to buy a flat for my in-laws?

Mojisola

2cb wrote: »

But if their £150k is tied up in a house that I half own, how will they pay then? Is that any better?

If their money was spent on their house, the value of the property would be disregarded and they would be entitled to help.

If their money was spent on their house and they both (or the survivor of the couple) needed residential care, the LA would put a charge on the house so that the money could be paid back when the house was sold.

If they just gave the money away, they wouldn't be entitled to free care.

Wh05apk

2cb wrote: »

How? I'm interested!

Currently on a good lifetime tracker with no fees, but I don't know if they'll let me increase it. I suppose I just get quotes for both and see what's the best deal I can get?

If the property was solely in your name, as a second property you would be liable for CGT on any profits, your parents share would be free, as it is their main property, potentially on their deaths it would pass to you, and presumably would be under the inheritance tax threshold?

2cb

So it looks like there are two good reasons why the house needs to be at least partly in their names. In case they need to go into care, and for CGT reasons. They should be well under the IHT threshold at least.
Is the CGT on my share calculated on increased value, or profit? I'm not expecting to make much, if anything, on this. Any gain in value could easily be wiped out by what we've paid in interest, stamp duty, fees, moving costs etc. Can these all be offset against CGT, or am I likely to be paying tax on the increase in value even though I've made no profit?

Wh05apk

Increase in value, if it was a BTL you could offset some of the costs against income tax.

Let_Us_See

Goodness, talk about complicating matters!

Raise funds on your property, probably with existing lender, to allow outright purchase of new property with the title deeds Tenants in Common to reflect parents deposit and your £90,000 investment. Simple.

No new mortgages required, parents not requiring a mortgage, possible regulated BTL not required............KISS! This is a no brainer for any broker.

Wh05apk

Let_Us_See wrote: »

Goodness, talk about complicating matters!

Raise funds on your property, probably with existing lender, to allow outright purchase of new property with the title deeds Tenants in Common to reflect parents deposit and your £90,000 investment. Simple.

No new mortgages required, parents not requiring a mortgage, possible regulated BTL not required............KISS! This is a no brainer for any broker.

Borrowing against own property will likely be at a higher rate than a new mortgage with likely higher fees, will be restricted by remaining term on existing mortgage, will then likely be on a fixed term deal which in 2/5 years when ever will need to be switched to a better deal with existing lender, or remortgage at that time to another lender and lose the existing favourable deal.


This should be as simple if not simpler than a further advance.

Let_Us_See

Wh05apk wrote: »

Borrowing against own property will likely be at a higher rate than a new mortgage with likely higher fees, will be restricted by remaining term on existing mortgage, will then likely be on a fixed term deal which in 2/5 years when ever will need to be switched to a better deal with existing lender, or remortgage at that time to another lender and lose the existing favourable deal.


This should be as simple if not simpler than a further advance.

"This should be as simple if not simpler than a further advance."

Whilst I agree with your eventual deduction, isn't a further advance exactly what you have dismissed in the paragraph above?

Wh05apk

Let_Us_See wrote: »

"This should be as simple if not simpler than a further advance."

Whilst I agree with your eventual deduction, isn't a further advance exactly what you have dismissed in the paragraph above?

Not sure what your point is, a further advance will likely be more expensive, depending on the lender, the OP will have to apply direct, which could takes weeks to get an appointment, then will have to be co-ordinated with the purchase of the new property, drawing down then transferring to the solicitor dealing with the purchase.

2cb

So, to sum up...
It's definitely a standard mortgage on the new property or an extra mortgage on my current one. It doesn't make any difference which, just go for the best deal. BTL is not an option and there are no other ways worth considering?
Thanks everyone.