Advice on buying a second property

foxy-stoat

beckysbobbles1 wrote: »

Truthful... what sort of comment is that???

I am doubting your broker being able to offer a residental mortgage on a 1 bedroom flat that you are planning on letting to a family member - unless they will suggest bending the truth on the application form, hence why I said good luck.

If you manage to secure the mortgage report back, it may help others trying to do the same sort of thing.

beckysbobbles1

foxy-stoat wrote: »

I am doubting your broker being able to offer a residental mortgage on a 1 bedroom flat that you are planning on letting to a family member - unless they will suggest bending the truth on the application form, hence why I said good luck.

If you manage to secure the mortgage report back, it may help others trying to do the same sort of thing.

Please explain to me why this would not be possibly?


Our affordability is high therefore the mortgage can be secured. The LTV on the new property will be 80% and the mortgage minimal.


I honestly don't see the issue here.

foxy-stoat

beckysbobbles1 wrote: »

Please explain to me why this would not be possibly?

Our affordability is high therefore the mortgage can be secured. The LTV on the new property will be 80% and the mortgage minimal.

I honestly don't see the issue here.

If the lender is happy for you to proceed with a residental mortgage where you will be letting the property to a family member on day one then you will not have an issue.

I cannot see any instances where a lender would be happy with this unless its a regulated Buy to Let mortgage.

beckysbobbles1

foxy-stoat wrote: »

If the lender is happy for you to proceed with a residental mortgage where you will be letting the property to a family member on day one then you will not have an issue.

I cannot see any instances where a lender would be happy with this unless its a regulated Buy to Let mortgage.

Perhaps you don't understand mortgages as well as you thought. Residential means family living... Buy to Let means tenant (non family!). Simple.

Soundgirlrocks

I think people are assuming your father in law is going to be paying you rent. I used to live in a flat owned by my grandmother, she had a small residential mortgage on it, there wasn't an issue as I wasn't paying her rent.

Thrugelmir

beckysbobbles1 wrote: »

Please explain to me why this would not be possibly?


Our affordability is high therefore the mortgage can be secured. The LTV on the new property will be 80% and the mortgage minimal.


I honestly don't see the issue here.

Where's the deposit coming from. Will your FIL have a financial interest?

Will your income support both mortgages if need be?

Brock_and_Roll

FWW, I think the OP is failing to understand the issues that lenders have (from painful experience) with these kind of arrangements.


As a matter of interest, if there were no tenancy or any other written arrangements in place would this make any difference to lenders? - as a banker my gut instinct tells me that the lenders security over the asset is potentially jeopardised in a repossession scenario. I can see the occupier implying that they have an implied tenancy etc


I guess the OP would also be hit by the 3% stamp duty surcharge?

beckysbobbles1

Thrugelmir wrote: »

Where's the deposit coming from. Will your FIL have a financial interest?

Will your income support both mortgages if need be?

The deposit is from my own savings.


And yes our income will easily support both mortgages.


We do not expect FIL to pay any rent. He is simply living in a property that we will own.


It's quite simply that he will have no financial interest in the property. Most lenders require a legal document to be signed waiver these rights.


My fianc! signed one as he is living in my house and is not on the mortgage.

Verix

OP, I wouldn't be too worried about it. At no point have you mentioned that you FIL would rent the property off you, clearly you are asking about a 2nd residential for a dependent relative. No great issues there for a competent broker.


Everyone on here will always tell you to speak to a broker and then as soon as you do, people will have a dig at you The internet can bring out the worst in people.

DavidT67

"2nd property in joint names." Remember, if either one of you already own another property, then the purchase will be liable to additional property punitive 3% stamp duty tax.

Plus as others have said, if it's not your "main residence" then is not a residential property, so think about capital gains tax as well.