Using an inherited house as collateral questions

Josh2290

I'm looking to buy my first house and my dad offered to transfer one of his rental properties (which he inherited from his dad) into my name. It's only valued at about £30k but it's mortgage free and has a rental income of around £250 pcm.

My dad said I can used the house as collateral for getting my own mortgage but I'm wondering about the details of it.

Let's say I bought a house for £90k with a 25 year mortgage and never moved. If I used the house as collateral, would I be paying for a mortgage of £90k or £60k? If it's a £60k mortgage, what happens after 25 years? Do the lender get the £30k house or will I have to come up with £30k from somewhere?

£90k is more than I'd likely be able to borrow on my current salary. I've got £20k of my own savings I was planning on using as a deposit before my dad offered me the property. Would it be better to add a deposit from my savings, lets say £10k, as well as using the £30k house as collateral?

I dont want to sell the house as it's making a 10% ROI.

If anyone could help answer my questions or point me in the right place to read more, I'd be very grateful! I can't find anything to do with my situation anywhere.

Let_Us_See

Your father is almost as bad as the man down the pub! Whilst you cannot use the gifted property as collateral, you could re-mortgage as a BTL to release funds towards the deposit of your proposed residential home.

Find a good broker to co-ordinate BTL re-mortgage and purchase as your BTL options will be limited if classified as a First Time Landlord.

amnblog

As above - you need your Dad to step aside and a good broker to come in.