But to let for son to live in

Dan-Dan

Mossfarr wrote: »

This is not correct.

It is in the OP`s scenario

16confused

Thank you everyone particularly Mossfarr and Haras.


Why go for a buy to let mortgage?
You can apply for a second residential mortgage in joint names with your son. He lives in it and pays the mortgage & other bills. He builds up a credit history - but you remain responsible for the mortgage payments if he can't pay.
You have to be able to demonstrate that you can afford to pay the second mortgage as well as your own housing costs.
At some point in the future when your son is in a stronger financial position he can remortgage & pay you back what you've spent or you can transfer the house completely to him.
(I have done this with my daughter so it is a perfectly viable option).
Unfortunately you will be liable to pay the additional 3% as it will be classed a a second home for you.


Mossfar - this seems like a good idea indeed. I only owe about £200 on my mortgage and the property is worth c£260k.


I could just pay this off so I have no mortgage on the property at all. The only issue is that I'm now 60 years old and so may struggle to get a mortgage.


Who did you do your mortgage with? Please could you send a link about this?


I'm assuming that you weren't required to give any security over your own property? I'm keen to help but can't go that far. I would have to pay off the mortgage completely to do that anyway.


Perhaps if my son has a big enough deposit and the repayments can be kept low enough say £300 my salary would be enough to show ability to cover the mortgage? Alternatively he may need to go for a more modest property. With a £30k - 340k deposit on a property with a value of £70k - £100k. The LTV and repayments could be quite low. We'll need to do some playing around with one of the mortgage claculators to see how low the repayments could go.


My son is 32 and so has many years work ahead of him. He is single and has no debts or other commitments. Unfortunately there is very little permanent work in the area and many contracts are just 6-12 months long. He has generally always been in work and I expect him to find a new job shortly. He would not be reliant on benefits to make mortgage payments.


I have considered what if he couldn't pay me back and would adjust my will accordingly so he could take this towards his inheritance if for some reason he couldn't pay me back. I have another son and helped him with a deposit on his first property and he paid me back years ago. He's unlikely to need any funds from me and is fine with this so it won't cause any disagreements in the family.


I just want to help him get on the housing ladder and not get stuck renting forever. Another option would be to downsize my hose and realease some cash so that he can have a bigger deposit and possible a better chance of getting a mortgage but I'd rather not do this for now.


Haras
I have heard this before. This is not an option then. Out of curiosity what is the reason for this requirement to already own another property?


Thanks to you all. Please keep the practical suggestions coming.

marksoton

16confused wrote: »

Thank you everyone particularly Mossfarr and Haras.


Why go for a buy to let mortgage?
You can apply for a second residential mortgage in joint names with your son. He lives in it and pays the mortgage & other bills. He builds up a credit history - but you remain responsible for the mortgage payments if he can't pay. If he has no credit history and given your age a mortgage is unlikely...
You have to be able to demonstrate that you can afford to pay the second mortgage as well as your own housing costs. Indeed...
At some point in the future when your son is in a stronger financial position he can remortgage & pay you back what you've spent or you can transfer the house completely to him. Not as simple as that...
(I have done this with my daughter so it is a perfectly viable option).
Unfortunately you will be liable to pay the additional 3% as it will be classed a a second home for you. Indeed...


Mossfar - this seems like a good idea indeed. I only owe about £200 on my mortgage and the property is worth c£260k.
£200 ?!

I could just pay this off so I have no mortgage on the property at all. The only issue is that I'm now 60 years old and so may struggle to get a mortgage. See above...


Who did you do your mortgage with? Please could you send a link about this? Try a broker...


I'm assuming that you weren't required to give any security over your own property? I'm keen to help but can't go that far. I would have to pay off the mortgage completely to do that anyway. Why..?


Perhaps if my son has a big enough deposit and the repayments can be kept low enough say £300 my salary would be enough to show ability to cover the mortgage? Alternatively he may need to go for a more modest property. With a £30k - 340k deposit on a property with a value of £70k - £100k. The LTV and repayments could be quite low. We'll need to do some playing around with one of the mortgage claculators to see how low the repayments could go. Broker...


My son is 32 and so has many years work ahead of him. He is single and has no debts or other commitments. Unfortunately there is very little permanent work in the area and many contracts are just 6-12 months long. He has generally always been in work and I expect him to find a new job shortly. He would not be reliant on benefits to make mortgage payments. You don't know this..


I have considered what if he couldn't pay me back and would adjust my will accordingly so he could take this towards his inheritance if for some reason he couldn't pay me back. I have another son and helped him with a deposit on his first property and he paid me back years ago. He's unlikely to need any funds from me and is fine with this so it won't cause any disagreements in the family.Irrelevant to a lender...


I just want to help him get on the housing ladder and not get stuck renting forever. Another option would be to downsize my hose and realease some cash so that he can have a bigger deposit and possible a better chance of getting a mortgage but I'd rather not do this for now. So you'd downsize with all the associated costs but not secure against your property!?


Haras
I have heard this before. This is not an option then. Out of curiosity what is the reason for this requirement to already own another property? Because it's secured against any other mortgage...


Thanks to you all. Please keep the practical suggestions coming.

See above in red...

haras_nosirrah

The reason our compliance department has given for us as a broker firm not supporting btl for first time buyers or people without a residential property already is because it is used by people to get a mortgage for a property under a btl basis so circumventing the affordability rules of a normal residential mortgage I.e people using a btl mortgage to get a mortgage for a house they intend to live in and could not get under residential affordability rules

We are also told to look at people's current living situation to judge if we should refuse the business for the same reason e.g

Family with children who live in a 1 bed flat on a residential mortgage but want to buy a 3 bed to rent out - clearly they will rent out the 1 bed and move into the 3 bed

Someone who has a residential mortgage in Manchester and wants to buy to let in London which happens to be where their job is moving to

We are told to question their current property and future plans as if the lender suspects the client intends to live in a property they have a btl mortgage on then it is our jobs on the line.

Mossfarr

16confused wrote: »

Thank you everyone particularly Mossfarr and Haras.


I could just pay this off so I have no mortgage on the property at all. The only issue is that I'm now 60 years old and so may struggle to get a mortgage. you can probably still get a mortgage but the term will only be until you reach 70 yrs - in your case 10 years. Both myself and my husband took early retirement but I still managed to buy another house on a BTL mortgage 2 years after this one! Make an appointment to see the financial advisor at your bank - its free - and you are not under any obligation to buy their products. The advice I was given was superb. You can also speak to an independant mortgage advisor but you will probably have to pay a fee.

Who did you do your mortgage with? Please could you send a link about this? My mortgage is with Royal bank of Scotland - Probably not the cheapest option but it was such an easy process it was worth it! I have banked with them for over 20 years so they already had details of my financial situation.

I'm assuming that you weren't required to give any security over your own property? I'm keen to help but can't go that far. I would have to pay off the mortgage completely to do that anyway. At that time I didn't actually own another property, I live with my Mother (its a long and complicated story)!

I have considered what if he couldn't pay me back and would adjust my will accordingly so he could take this towards his inheritance if for some reason he couldn't pay me back. I have another son and helped him with a deposit on his first property and he paid me back years ago. He's unlikely to need any funds from me and is fine with this so it won't cause any disagreements in the family. Its really important to discuss this openly with both your sons. I was very careful to show both my children that they were being treated equally.

I just want to help him get on the housing ladder and not get stuck renting forever. my daughter was going to rent a property but it was actually significantly cheaper for her to buy - with a hefty deposit from me of course!