Some advice please

booveedoo

Hi. Looking for some advice please and if it`s achievable.

My partner has a property that her and her sister rent out. There is a small mortgage on it.
Now, they have both decided to sell up (more her sister than my partner). Her sister`s cut will pay off the existing mortgage. We will then  get the house valued.

So, I`m thinking of buying the property of them and my partner will put down 50% of the new mortgage (interest only) I will take out. It`ll all be drawn up than she owns 1/2 the house when we finally decide to sell up in 10 years or so time. We will rent out the property. 

We have both had a mortgage in the past that has been paid off. 

Questions are:

How do we accomplish the sale and me buying it?
Am I classified as a first time buyer or....??

Thanks. Advice appreciated, even though to some it may seem straightforward!

canaldumidi

How do we accomplish the sale and me buying it?
Am I classified as a first time buyer or....??

Since you say "It`ll all be drawn up than she owns 1/2 the house" I don't understand "'me buying it'. Surely you and your partner are buying jointly?

How accomplish?

1) get valuation and agree price

2) get mortgage statement and redemption cost

3) pay off mortgage - either splitting the cost 50/50, or one of you pays it off with ageement that following the sale an adjustment will be made to re-imburse 50% of that cost

4) Send forms AP1, TR1, ID1 to the Land Registry to transfer ownership

5) pay sister half the market value (adjusted if necessary by 3 above).

As you and your partner have both had mortgages in the past, you are not FTBs so far as HMRC are concerned.

Some banks may consider you FTBs for mortgage purposes though since you do not (I think?) currently own any properties or have current mortgages.

booveedoo

canaldumidi said:

How do we accomplish the sale and me buying it?
Am I classified as a first time buyer or....??

Since you say "It`ll all be drawn up than she owns 1/2 the house" I don't understand "'me buying it'. Surely you and your partner are buying jointly?

How accomplish?

1) get valuation and agree price

2) get mortgage statement and redemption cost

3) pay off mortgage - either splitting the cost 50/50, or one of you pays it off with ageement that following the sale an adjustment will be made to re-imburse 50% of that cost

4) Send forms AP1, TR1, ID1 to the Land Registry to transfer ownership

5) pay sister half the market value (adjusted if necessary by 3 above).

As you and your partner have both had mortgages in the past, you are not FTBs so far as HMRC are concerned.

Some banks may consider you FTBs for mortgage purposes though since you do not (I think?) currently own any properties or have current mortgages.

Thanks for your advice. Much appreciated! 
Yes, sorry, meant to say that we are buying it jointly. I`ll be actually paying the interest free mortgage and we`ll both get 1/2 the monthly rent.

eddddy

booveedoo said:

I`ll be actually paying the interest free mortgage and we`ll both get 1/2 the monthly rent.

I'd like that kind of mortgage!

(I think you mean 'interest only mortgage'.)

booveedoo

eddddy said:

booveedoo said:

I`ll be actually paying the interest free mortgage and we`ll both get 1/2 the monthly rent.

I'd like that kind of mortgage!

(I think you mean 'interest only mortgage'.)

Haha! I wish!!!!!

booveedoo

Ok. So I want to elaborate on my initial post. 

When applying for a new mortgage, I suspect a lender requires me to be employed.
However, I am not. In fact I`m now retired (@57 with good pension and savings). My situation to them would be 50% deposit paid and use savings/redundancy/rental income to request an interest only mortgage from them? What are my chances? If not the big lenders, any independents likely? And if no, what would my options be to becoming a landlord? Thanks 

Zerforax

booveedoo said:

Ok. So I want to elaborate on my initial post. 

When applying for a new mortgage, I suspect a lender requires me to be employed.
However, I am not. In fact I`m now retired (@57 with good pension and savings). My situation to them would be 50% deposit paid and use savings/redundancy/rental income to request an interest only mortgage from them? What are my chances? If not the big lenders, any independents likely? And if no, what would my options be to becoming a landlord? Thanks 

How would you show that you can pay off the mortgage once the interest only term has ended?

canaldumidi

booveedoo said:

Ok. So I want to elaborate on my initial post. 

When applying for a new mortgage, I suspect a lender requires me to be employed.
However, I am not. In fact I`m now retired (@57 with good pension and savings). My situation to them would be 50% deposit paid and use savings/redundancy/rental income to request an interest only mortgage from them? What are my chances? If not the big lenders, any independents likely? And if no, what would my options be to becoming a landlord? Thanks 

Either see an independant mortgage broker, and/or post on the mortgage board here.

booveedoo

Zerforax said:

booveedoo said:

Ok. So I want to elaborate on my initial post. 

When applying for a new mortgage, I suspect a lender requires me to be employed.
However, I am not. In fact I`m now retired (@57 with good pension and savings). My situation to them would be 50% deposit paid and use savings/redundancy/rental income to request an interest only mortgage from them? What are my chances? If not the big lenders, any independents likely? And if no, what would my options be to becoming a landlord? Thanks 

How would you show that you can pay off the mortgage once the interest only term has ended?

Sell the house, after giving tenants notice. Hopefully this will pay it of.

Slithery

booveedoo said:

Zerforax said:

booveedoo said:

Ok. So I want to elaborate on my initial post. 

When applying for a new mortgage, I suspect a lender requires me to be employed.
However, I am not. In fact I`m now retired (@57 with good pension and savings). My situation to them would be 50% deposit paid and use savings/redundancy/rental income to request an interest only mortgage from them? What are my chances? If not the big lenders, any independents likely? And if no, what would my options be to becoming a landlord? Thanks 

How would you show that you can pay off the mortgage once the interest only term has ended?

Sell the house, after giving tenants notice. Hopefully this will pay it of.

And what makes you think that you will be able to do this? The government is currently looking into abolishing S21's meaning that unless your tenant is behind on rent you may never be able to legally evict them.

booveedoo

Slithery said:

booveedoo said:

Zerforax said:

booveedoo said:

Ok. So I want to elaborate on my initial post. 

When applying for a new mortgage, I suspect a lender requires me to be employed.
However, I am not. In fact I`m now retired (@57 with good pension and savings). My situation to them would be 50% deposit paid and use savings/redundancy/rental income to request an interest only mortgage from them? What are my chances? If not the big lenders, any independents likely? And if no, what would my options be to becoming a landlord? Thanks 

How would you show that you can pay off the mortgage once the interest only term has ended?

Sell the house, after giving tenants notice. Hopefully this will pay it of.

And what makes you think that you will be able to do this? The government is currently looking into abolishing S21's meaning that unless your tenant is behind on rent you may never be able to legally evict them.

Ok. Didn't know this. In fact, these questions I ask are all based on not knowing anything like this and appreciate your feedback. Thanks. Good news for tenants, bad for landlords? I guess rents will have to capped then by The Government too...so a landlord can force the tenant to go behind on rent by increasing it above the odds. Is there a rule governing how much rent a landlord can increase it by?