Is Our Mortgage Plan Realistic?

endee68

Thanks K_S

We are in the North West

endee68

Thank you for all your advice, the 15 year repayment option as suggested would be more preferable however, I think we would be struggling to acquire a mortgage for 15 years due to my husband's health. Looks like we are going to be renting again but somewhere else.

getmore4less

The property in question is valued at £250-260,000. Our current landlord is prepared to accept £200,000 from us 

The rent is £650/month and has been for the last 6 years (if we had to move to a similar property now the average rent would be £900+).
We are now saving around £500 month.

Looking at those numbers gross yield on offer price and high estimate
£650pm 3.9% 3.0%
£900pm 5.4% 4.1%
None of those are great  for an investor buyer.

what did he buy the place for that he was happy with such low yields.
Liquidating all his stock in one go is not very CGT efficient
maybe he will let you stay longer, with the current legislation and court delays you are effectively volunteering to leave.

Another option might be that he funds with a private mortgage if he does not need the capital all in one go.
That 2% over 15years was £900pm a total of £162k

You buy for £222k(£60k down) £162 total debt and pay £900pm  till sold then pay off the rest of the debt.
You would owe a bit more at 10years but the LL does not have any tax to pay as he would if you got a bigger discount and paid interest

How sustainable is this £650pm rent money and £500pm savings  there is a lot less help for mortgage payments than there is for rent.

Nebulous2

How are you for pensions? I got a mortgage from Nationwide at 56, which was scheduled to carry on post retirement  and they were happy to consider my pension for paying that- though my situation was different. It was also 3 years ago, which was a different world.