Mortgage for student daughter

Chisser

My daughter is starting a second (4 year) degree. We don't want to pour more money into rent, and she has saved/inherited a £20K deposit (1/2 held in a LISA). We want to help her buy her first home soon in her name but are worried she not qualify for a mortgage as she will have negligible income for 4 years (perhaps £200 pcm). We have a lot of equity in our house and a tiny mortgage, which will be paid off in 3 years. We are happy to pay the mortgage in lieu of the rent we were paying for her. Is this a goer of an idea? Thank you.

Tom99

[FONT=Verdana, sans-serif]Could you buy a house in joint names but with a deed of trust saying the beneficial ownership is 100%/0%.[/FONT]
[FONT=Verdana, sans-serif]I am not sure, but that might overcome the stamp duty and CGT issues.[/FONT]

sal_III

Most lenders require all the parties named on the deeds to be named on the mortgage. So buying it her name with a mortgage is going to be problematic.

csgohan4

lenders will assess her, how will she pay the rent? what income does she have? Gifts from parents to pay the mortgage is not acceptable as income

LRmortgage

If you have an income then Joint borrower, sole proprietor mortgages are becoming more common these days.

Effectively you get a joint mortgage with your daughter, utilising your income for the application but only her name goes on the deed. No extra stamp duty to pay.

A decent broker should be able to help you with this.

michaels

Could you remortage your home to cover the cost of her property and then lend her the money with a charge over her property, she could then remortgage and repay your loan once she starts earning.


This assumes she will keep the property after she graduates, if you only plan 4 years of ownership the transaction costs may still make renting better value.

amnblog

She can buy a property as a student using rent from housemates as income for affordability.

This type of specialist deal is available through a few smaller building societies. Is that what you had I mind?

dimbo61

https://www.theguardian.com/money/2017/feb/27/buy-for-uni-mortgage-students-landlords-higher-education

Have a read !

https://www.bathbuildingsociety.co.uk/mortgages/mortgage-products-for-individuals/buy-for-uni

dimbo61

As a student Landlord I think this is a very bad idea.
I could give you one hundred reasons

Chisser

We looked into the two buy-for-Uni mortgages (Bath and Loughborough Bld Socs). The interest rate seemed very high at nearly 5% with now early discounted period. Any idea why this is, even for 80%
LTV?

dimbo61

Tax changes with BTL, new HMO regulations, no 10% wear and tear allowance,
Picking the right property and getting the funds sorted in time to purchase the place.
Fitting out the property to current fire safety, gas safe certificate, smoke alarms, CO alarm.
Tenancy agreements and falling out with your friends /tenants .
Student BTL,s are very very high risk and councils do not help at all.
Have a look on the Manchester Student Homes website just to get a tiny idea of the major headache being a student landlord can be.
PS the Landlord forum for MSH is on the 1st of November 6 till 8pm.
Come along for an education.