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Buying a house with someone else, for them to live in
martin1976
Posts: 56 Forumite
Hi. I am just after a bit of advice on a situation, any pros, cons etc and any more advice on what may be needed or required. Apologies if this is not the correct section or been covered before.
The situation is this.
Party A wants to buy a house, has income but no savings.
Party B has some savings but no income to buy a house, is looking for a decent investment.
Party B gives party A the savings to buy the deposit but will not live in the property, nor pay anything towards the outstanding loan each month.
What needs to be drawn up for this to be legal and binding and for everything to be covered? I am guessing that party B will own a fixed percentage of the property calculated by the purchase price and amount "lent" and be due some kind of rental income on a monthly basis. How would this be calculated or agreed?
Also what would happen in regard to a death or repossession, or even any upkeep costs? I am guessing both parties would need a will as an absolute minimum.
What about the initial set up mortgage costs. Would these be split or only the mortgaged (Party A) pay as they would be the one with the mortgage?
I am guessing any purchase costs (solicitors, tax, survey etc) would be split by proportion in accordance to the amount lent?
Can anyone offer any advice or experience on this situation? Thanks.
The situation is this.
Party A wants to buy a house, has income but no savings.
Party B has some savings but no income to buy a house, is looking for a decent investment.
Party B gives party A the savings to buy the deposit but will not live in the property, nor pay anything towards the outstanding loan each month.
What needs to be drawn up for this to be legal and binding and for everything to be covered? I am guessing that party B will own a fixed percentage of the property calculated by the purchase price and amount "lent" and be due some kind of rental income on a monthly basis. How would this be calculated or agreed?
Also what would happen in regard to a death or repossession, or even any upkeep costs? I am guessing both parties would need a will as an absolute minimum.
What about the initial set up mortgage costs. Would these be split or only the mortgaged (Party A) pay as they would be the one with the mortgage?
I am guessing any purchase costs (solicitors, tax, survey etc) would be split by proportion in accordance to the amount lent?
Can anyone offer any advice or experience on this situation? Thanks.
0
Comments
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..I would go and see a solicitor....."It's everybody's fault but mine...."0
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It has been asked here before, and in short the main problem is that you'll be struggling to find a mortgage lender who will put up with this. They'll expect joint owners either to be both resident, or both purely landlords, not one resident and one landlord. And even if you take the "investor" out of the ownership/mortgage, lenders don't like deposits coming from a third party who has some sort of interest in the property.0
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I can't seem to find where this has been covered before, can anyone provide a link please?0
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Do A or B own another residential property, anywhere in the world?
If so, additional SDLT may apply...0 -
money and friends/strangers shouldn't mix plenty of cases where it's gone wrong, more to lose when it does
https://forums.moneysavingexpert.com/discussion/5848405/selling-when-one-party-doesnt-want-to
https://forums.moneysavingexpert.com/discussion/5896270/shared-mortgage-with-a-friend-problem"It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
G_M/ Bowlhead99 RIP0 -
martin1976 wrote: »
Can anyone offer any advice or experience on this situation? Thanks.
I used this earlier today but its appropriate here as well.
https://www.youtube.com/watch?v=Y7QhxklIKbw0
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