Mortgage at 16

nihammon

Hi Everyone,

First time post so apologies if it's in the wrong place or I'm asking something that's already been answered (I did search and couldn't find a suitable answer).

I have two lovely daughters, who are 16 and 14 respectively this year. Both have inherited money to the tune of £60k each and both are keen to spend to invest for their futures.

The 16 year old would like to buy her own house with my wife and I acting as guarantors for a buy-to-let mortgage as she is not 18. I suspect the LTV will be <=70%. Is that even possible? Anyone done it before and what would the tax implications be if any? This will part fund her university studies (she has it all mapped out and then she'll have the option of moving in at a later date or continue to rent it out.

The 14 year old would like to invest her money in savings until she's 16 and if the above arrangement works, do the same. I haven't seen anything that offers a decent yield - any ideas?

Many Thanks,
Nick

csgohan4

what is the budget for the house they want to buy?

Do they know the tax and legal implications of being a landlord?

Do they know the changes in the tax law make it less desirable?

https://www.gov.uk/government/news/changes-to-tax-relief-for-residential-landlords

Can they swallow periods of no tenants or having to evict tenants who won't pay, could be in the thousands for court costs e.t.c

Real estate isn't the only way to invest money, stocks and shares e,t,c, consult a good In dependant financial adviser

http://forums.moneysavingexpert.com/showpost.php?p=67759929&postcount=7

kingstreet

Minimum age is 18 and there are very limited options for first time buyers wanting to buy a BTL. They have to be able to demonstrate they can afford it as a residential.

ACG

As above, 18 is the minimum. The reason being is that whilst under 18s can enter legally binding cotracts, they are deemed not old enough to understand the consequences (even with guarantors/guardians), so the lender does not have the protection they need.

http://www.netlawman.co.uk/ia/entering-contract-minor

It may be worth looking at this to see if this works?
http://www.zoopla.co.uk/discover/buying/property-investment-guide/

I would argue that an 18 year old should not be dabbling in the BTL market either, unless they have some experience either through family or working in an estate/letting agents.

bluesnake

"Any ideas"... Hate to be the neigh-sayer before your daughters, and your sake, make sure they purchase the house in a way where the future spouse does not get half on divorce and half of your invested money too, or lend against the property and on separation find now she has a bigger debt based on the current value.

One out of four children are born out of marriage. If you are young, have a mortgage and a baby, the math seems grim.

it was calculated in the UK in 2013 42% or marriages end in divorce. Then there are those couples that lead separate, or hateful lives http://www.ons.gov.uk/ons/rel/vs!!!/divorces-in-england-and-wales/2011/sty-what-percentage-of-marriages-end-in-divorce.html

Think the actual stats are about a third of the married people get divorced, but that one third has multiple marriages to make up the 42%

I have met both these type of people. You may think you can claim against them if they are wealthy, but as one found out that her husbands business only paid him a fraction in salary, though he could drive a new truck and support his 3 other kids, and having luxury holidays, while the disable child and mom was left after 17 years with a new mortgage to contend with. Apparently they sometime see him driving around town, and snippets from shared friends.

The words 'young and stupid' and 'love is blind' go hand in hand