Mortgage with self-employed dad and low incomes. Any hope?

Teacholic

Hello,

I have a few questions regarding getting a mortgage with my dad, but first some background info.

We're not British, but EU nationalities. My dad is self-employed and I don't know exactly how much he earns but I would estimate it at least £24k gross, so below average salary in the UK. Lately, he came up with an idea that instead of him renting his place he would prefer to take a mortgage with me and pay it alone for years he's going to live there (around 10 years until he retire and go back home). Then I would pay the remaining of the mortgage and keep the house or if I don't want to, rent it or sell it. He's 52 now so he won't get a mortgage on his own. Myself, I'm 25 and earn much less than my dad, around 16k gross and had roughly £30k student loan.

1) Is it plausible we would get a mortgage together? and would it be high enough?

2) Can my dad pay mortgage on his own for the first 10 years and so and be the only to provide a deposit?

I also have some worries because my dad is self-employed. He did have periods he was out of work for 3-4 months in past years, although not in the last couple of years. I'm worried he wouldn't be able to pay the mortgage due to be out of work or accident.

3) Can we get a mortgage insurance just for my dad for the years until he retire?

I was also thinking what will happen when he moves out and I take care of the property? Will I have to pay him some money or tax?

4) Will I have to pay my dad tax if I decide to sell the property? How do you go around this so if I sell I wouldn't have to pay any tax?

5) Will my siblings have any rights to the property in the eventuality my dad dies before I pay the mortgage?

6) Should I be aware of anything in particular? Fees, laws, and so on.

I'm quite confused about this all, and so new to this. I'm thinking of going to an independent mortgage advisor but would like to find one with a free first consultation. My dad wanted to go to our bank for advice, but I don't trust their impartiality.

7) Would you recommend mortgage advisor and how would they help and at what costs?

Sorry about the long list of questions. I'm very confused! I hope someone will be able to answer some of them. I would love to have a property on my own as it'd give me some financial stability in my life. However, I'm not sure if it's worth doing it now.

amnblog

1) Yes it can be done
2) If you are both on the mortgage it must be paid - it does not matter who's income pays it
3) your Dad should be able to get insurance
4) It would appear not
5) Potentially yes, discuss this with your solicitor when you buy
6) You should definitely see a broker
7) They would answer all your questions and concerns throughout the process - expect to pay between £250 and £1,000 depending on their terms.

Teacholic

amnblog Thanks a lot for the help! I'm uncertain about the tax situation when I try to sell property before mortgage is paid off. Can anyone comment about the tax and what's the percentage to be paid?

Re mortgage broker, £250 for an appointment! So expensive Wouldn't it be worth going to a bank and speak to their advisors just to get general information?

Dave_Ham

No one can talk specifically on your tax position, as there are too many unknown variables and the future mag change.

Typically residential property sales are exempt from capital gains tax.

Most brokers will charge for proceeding or achieving a mortgage rather than an appointment

That said, most won't be delighted about you rocking down, picking their brains and then trying to pull together yourself.

Worth noting, banks advisors are under extreme pressure and not always the most experienced. Sometimes you get what you pay for

Good luck

kingstreet

My dad is self-employed and I don't know exactly how much he earns but I would estimate it at least £24k gross,

For the self-employed, net profit is used.

He'll be expected to provide two or more years' HMRC SA302s to evidence his income and the lender will average the latest couple of years to calculate his income.