Parents are getting me a mortgage

kingstreet

So it's sole proprietor - you alone own the property so no nasty 3% additional stamp duty charge for anyone who already owns their own home and;-

joint borrowers - you and your parents are the joint mortgage borrowers so affordability is met as your parents are effectively guarantors.

Doing a very similar case at this time.

leebates81

I could go into detail but didn't see the point. The mortgage road I tried to go down involved joint with my father which would still incur a 3%stamp duty.

I'm not bothered about fees I'm just seeing if what we'd like to do is possible and what the best way round it is?

Thanks for your responses

AnotherJoe

leebates81 wrote: »

remortgage

The length of the mortgage term is an irrelevance. What matters, if you wish to buy, is affordabilty. You've said you can't afford it at the moment. No one here has an crystal ball to know if you will be able to in five years time,

csgohan4

I hope you know what your getting yourself into as a LL

TrickyDicky101

ACG wrote: »

So your parents (assuming they own their own property now) will have to pay a higher rate of stamp duty. If they "sell" it within 3 years they can claim that back. You will also have to pay stamp duty (subject to the purchase price) when you buy it and your parents may have to pay capital gains tax. Thats before you count in parents legal fees for buying + parents legal fees for selling + your fees for buying + 2 x valuation fees - likely to be well in to the thousands of pounds.

It could be a very costly way of doing things assuming you did not get professional advise from an accountant and mortgage broker.

Assuming your income and credit report stacks up at the time you can purchase the property from your parents. If its not too late it might be worth speaking to a broker to see if it can be done in your name. One lender saying no is not the same as every lender saying no.

Assuming the parents were the owners (and not as Kingstreet suggested merely borrowers) then presumably this property will not be their sole residence and hence they won't be able to recover the additional SDLT (IMO - been wrong before so could be again).

kingstreet

leebates81 wrote: »

I could go into detail but didn't see the point. The mortgage road I tried to go down involved joint with my father which would still incur a 3%stamp duty.

Not if he isn't joint proprietor.

Being party to a mortgage alone does not trigger SDLT surcharge.

It's basic guarantor business.

scottishblondie

csgohan4 wrote: »

I hope you know what your getting yourself into as a LL

I hope his parents know what they are getting in to, as they will be the LLs rather than OP!

ACG

TrickyDicky101 wrote: »

Assuming the parents were the owners (and not as Kingstreet suggested merely borrowers) then presumably this property will not be their sole residence and hence they won't be able to recover the additional SDLT (IMO - been wrong before so could be again).

Your right, but he did say parents buying the house, thats different to just being on the mortgage and not the land registry.

I can only assume he has exhausted all other avenues and its still a worthwhile venture based on the posts so good luck to him.

Malmo

scottishblondie wrote: »

I hope his parents know what they are getting in to, as they will be the LLs rather than OP!

Might be an unpopular opinion, but people who attempt to circumvent established methods and ways of working are unlikely to have a strong and reliable grasp of the rules and regulations of running a BTL business.

ACG

Malmo wrote: »

Might be an unpopular opinion, but people who attempt to circumvent established methods and ways of working are unlikely to have a strong and reliable grasp of the rules and regulations of running a BTL business.

Tell that to Richard Branson who was done for Tax Evasion. Hes not doing too shabby