Buy to let mortgages

Ellalou

Hello, looking for some advice on Buy to Let mortgages! My mum and dad are living in a house worth around 280k just now, they have an interest only mortgage which will end in approx 3 & 1/2 years. They have around 195k outstanding and are paying this down as much as they can just now. So around £85k equity in the property right now. 

The obvious answer is to sell up after the 3 years and take the profit from the sale of the house. 

However, would it be an option for me and my husband to get a buy to let mortgage? We have our own mortgage which we have around 60k equity in just now. 

It would be buying to let to my parents so they can continue to stay there. 

Would this be an option? I know you need a large deposit for a buy to let mortgage, would that be the equity in the house? Or would we actually need to get a large sum of money to put down as a deposit? 

I’m thinking it could be a solution as it would mean my parents wouldn’t need to move and also investment for us? 

Any advice is appreciated and I’m sure it’s a lot more complicated to do anything like this than what I’ve just described! 

thank you 😊 

MWT

Ellalou said:

However, would it be an option for me and my husband to get a buy to let mortgage? We have our own mortgage which we have around 60k equity in just now. 

It would be buying to let to my parents so they can continue to stay there.

Probably a non-starter, with a Buy-to-Let you need to actually let the property out to earn rent and you cannot usually put close relatives into the property.

Do they have a rough idea how much they expect to still be outstanding on the mortgage when it falls due?

Also how old will they both be at that point?

[Deleted User]

You can do a Regulated BTL mortgage for this.  You cant do a normal BTL as you cant usually rent it to family.   Regulated BTL mortgages are usually based on personal affordability rather than the rental income so you will need to pass affordability to cover both mortgages on your own. 

Also, just because they are family doesnt mean you dont have to cover all the bases legally as a landlord.  Do some reading on what you would be getting in to 

pramsay13

Depending on their age they might be able to get a repayment mortgage for a number of years.

[Deleted User]

How old are your parents and are they both employed ? What are their salaries and debts ?
credit worthiness ? Any CCJ, defaults or late payments ?

Your option is virtually a non starter Im afraid - but see if we can think of other options 

[Deleted User]

Regulated BTL or 2nd residential for a dependant relative.  Both essentially the same thing.  You can get the equity in the property gifted to you and they can remain there.  Lots of potential implications there but from a mortgage point of view it can be done.  

Otherwise you can take a 4 person mortgage out and leave them as the only 2 on the deeds.  Thats another option.  With a lender who has no upper age limits it could give you another 20 odd years to repay the debt down