Mortgages to buy parents a house to live in

Migr110875

Hi.
My parents are currently private renting but are struggling financially and my father healthwise. They are in early 60's where my father is retired, claiming pip, and my mother is still working full time.
Myself and my wife want to buy a 2nd property near to us, for them to live in - to help and as a long term investment. We don't have the deposit for a buy to let today but could get 10% for a normal mortgage. House value would be c£100,000. After checking on various mortgage sites,! based on our salaries netting off current mortgage, it shows we could borrow the extra.
What's the lowest cost way to approach this?!
Are there any lenders who have mortgages for this situation?
Is it possible or legal for 1 of us to apply for a mortgage as though we are separating and one of us would live there but just move parents in?
Thanks for you help in advance.....Mike

ACG

You might struggle with this because of the deposit. There are lenders who would do it, but I think you would need a larger deposit.

Is it possible or legal for 1 of us to apply for a mortgage as though we are separating and one of us would live there but just move parents in?

No, that would be Mortgage Fraud.

It could be worth speaking to a Mortgage broker, they can then invest the time to do the research.

enthusiasticsaver

No it is not legal to buy a property to claim you intend living in there and then move 2 people unrelated to the mortgage into the property. Also what would happen if your parents could not afford to cover the mortgage say when your mum gives up work? Can you afford your mortgage and any potential new mortgage? You also would need a buy to let mortgage and a higher than usual deposit. A BTL mortgage is normally more expensive. Your parents will not qualify for housing benefit if the property is owned by a family member should they not be able to cover their housing costs in the future.

Migr110875

Hi. Thanks. Yes we can afford the mortgage as its our intention for them to live there foc. its just the amount of ltv deposit needed for a btl morgage so are trying to find the lowest cost solution to help.. We will talk to a financial advisor to see whats possible. Cheers

kingstreet

An independent broker will tell you it's fine for you to buy a property for dependent relatives to live in.

You cannot treat them as tenants, nor charge them rent, nor expect them to claim local housing allowance for you.

csgohan4

Money and family should never mix, unless your not expecting ANYTHING back, don't do it. Can you really upkeep 2 mortgages , because you are not going to get much in terms of covering a mortgage.


Sheltered accommodation or cheaper rentals might be an option. Shelter are a good charity to seek advice.

Thrugelmir

Migr110875 wrote: »

based on our salaries netting off current mortgage, it shows we could borrow the extra.

The lender on the second property would need to assess affordability for both mortgages. At the interest level set under regulartory guidence. Not just take into account what you are currently paying.