We Own the home but want a Buy To Let

hc97mg2000

Hi

Currently my mum has lived in her freehold house for many years. As a family we have decided it would be better for her to come live with us. This has now left the freehold house ready to go on rent. MY mum was hoping she could get a BTL mortgage on this home shes about to rent and use the capital she would release from it to buy another Investment property.

Becasue my mum is 60 I was not sure this would even be possible given her age. Plus her income is under 10K.

Would getting a BTL on this freehold house even be an option?

Thank you all in advance for any guidance

HappyMJ

It's possible but I've just got to ask why?

She can get a BTL mortgage. All she needs is £1 of income (i.e not make a loss) and she can qualify.

I'd stick with just letting out the one existing property and getting a BTL mortgage to raise money for living expenses and then using the rent to pay the interest on the BTL mortgage.

She would not be entitled to any benefits is she did this so make sure she has enough private pension as she won't get pension credit.

hc97mg2000

Hi thank you so much for your adivice

Well we tried to get a mortgage with the mortgage works and they came back and said that as she is a first time landlord she needs to have rented the house for a minimum of 6 months. so she wouldnt be eligible for BTL.

what she was hoping to do was to release some money from the exisiting house that shes about to let out. Use tha money to buy another rental property (EG the 25% deposit) and the rest on BTL mortgage?

that was the idea, but not sure if we can do that?

getmore4less

Does mum really want to start and manage a letting buisiness at 60?

What is the goal of this enterprise?

Understand that and it will give better direction

hc97mg2000

HI

the aim is that she wants to ideally get two properties that shes renting and eventually she would give one property to each of her children,

_CC_

hc97mg2000 wrote: »

HI

the aim is that she wants to ideally get two properties that shes renting and eventually she would give one property to each of her children,

Whose aim, yours or hers?

hc97mg2000

In this case it would be both.

Keep_pedalling

The whole idea is nuts, unless she is in really poor health, 60 is no age to be moving in with your kids especially as the longer term plan is for her to give all her assets away to them, leaving her totally dependant on them.

What the family have decided is best for her is almost certainly not what is in her best interests and she should take independant professional advice before making any big moves like this.

hc97mg2000

lol, that is an opnion rather than advice. Whether the mum wants to move in with kids is totally a isolated and family decision. There may be information is not disclosed as to why she would make a decision to do this or not. The assets would also firmly stay in her name, so should she need to go back or revert to her own home she has options. Also by doing such a thing would give her extra income that she would be the owner of.

Im not sure how this helps in term of the original question?

Keep_pedalling

Your statement that the family have decided it would be best for her rings alarm bells. I am slightly older than your mother and the thought of losing my independence and lumbering my children with a grumpy old git for the next 25-30 years is just unthinkable.

In your case health does not seem to be an issue as you say she can move back to the current situation, but if she wants to do this then fine but she should not do so without taking paid for advice.

_CC_

hc97mg2000 wrote: »

The assets would also firmly stay in her name, so should she need to go back or revert to her own home she has options. Also by doing such a thing would give her extra income that she would be the owner of.

Your Mum may receive minimal additional income (factoring in mortgage repayments, agency fees, ongoing maintenance and income tax) and if she did the income would impact any means tested benefit she currently receives or may receive in the future.

There's also a bit more to having two BTLs than just receiving some passive monthly income, she will have responsibilities to the tenants and need to invest time and money into the business. She would also have to declare expenses and income to the tax man.

She would be saddling herself with a large debt despite being 60 and on a low income.

There's also the potential for issues around capital gains tax and deprivation of capital depending on what happens to the properties.

As mentioned, she should seek proper professional advice so she fully knows the implications.