My mum buying my flat as buy to let

Jamesh_3

Hello all. I'm hoping someone can give me some advice on my current situation.
I've got a purchase going through on a house, my mum is going to buy my flat off me as a buy to let. She got refused her first mortgage by santander as it was selling to a family member. My first question is is likely to have difficulty finding a mortgage? She is currently waiting on another company to get back to her
She is also likely to be a bit short on deposit. Am I right in thinking no family members will be able to gift her any money, as it may look like dodgy in some way? Is there anyone that could gift her any money? Be it a friend etc. Also what is likelihood of the mortgage company even asking to see the deposit? Many thanks

Jamesh_3

She also has an isa or pension due to pay out in September. Could she be allowed to borrow against this as she has paperwork saying she is getting money then

G_M

Do you mean she'll be drawig a pension inclome? That is income. But then, how old is she? Many lenders have maximum age limits.

As for buying from a family member, why not see an independant mortgage broker? He'll know which lenders to approach.

For BTL she'll need a 25% deposit, and also the rent will need to be around 120% of the mortgage payments.

Jamesh_3

She has seen a broker. He got her to apply to santander, who rejected her. Now she's applied for another one.

She is getting some sort of isa or something pay out, unsure of exact details, but she has the paperwork to confirm that she'll be getting about £10k cash in September

Pixie5740

1. Does your mum actually want a BTL investment/business?
2. Is your flat going to give her the best return for her money?

I'm trying to understand why your mum wants to do this since she's already been rejected by one lender and doesn't have a large enough deposit. Are you reliant on selling your current property in order to buy the other property? Is that why your mum is going this?

Jamesh_3

Yes I am reliant on selling it to her in order to buy mine. She is doing it to help me out basically. I doubt she will make much if anything over the duration of the btl.

bris

Then you shouldn't be putting your mum through this. Being a reluctant LL will bring nothing but stress, sell it on the open market and don't put this kind of pressure on her.

Annisele

Jamesh wrote: »

Yes I am reliant on selling it to her in order to buy mine. She is doing it to help me out basically. I doubt she will make much if anything over the duration of the btl.

Then the problem might well be the valuation.

You're selling to your Mum for £x, but if you could get £x on the open market you'd do that instead. So the lender will be worried the property isn't actually worth £x - and that if it has to repossess, it'll lose out.

jbainbridge

She's buying it 'to help you out' ... Is something stopping you selling it normally?

Running_Horse

Never mix family and money, particularly a long term and inflexible investment like BTL. Sell your flat in the normal way, even if it means a slightly lower price. Perhaps your generous mum will help make up the shortfall.

Jamesh_3

The issue I have, and the main issue im moving, is I work from home. My business has basically taken over the flat, second bedroom is full with racking, boxes on the floor in the hall, and in the bedroom and lounge. I don't think I will get a good price for it and I cannot just pack it away as I need to continue working.
Back to the question in hand. Is she likely to struggle getting a btl mortgage?