Helping family out

SJE89

I am looking for a bit of advice. I purchased my first home last year, and to be honest, the only way I was bale to do so is because my mum passed away, unexpectedly and I received an inheritance.
My sister is honestly not very good with money and seems to have blown her way through most of her inheritance, already and is now worried about not ever owning her home.
I did ask her to contact a mortgage adviser, but she really seems to not like doing these things herself and would like someone else to do all the legwork for her. 
She has an existing IVA and approached me earlier in the year and asked if I would purchase a property on a BTL and rent it to her and she would pay the mortgage off.
I didn't want to do this if I am being completely honest, but she was crying saying she wants a house etc. and I agreed.
I have approached a mortgage adviser and they asked would I be letting the property out to any friends or family.
Well, I am not one to lie, especially with something like this which could have significant consequences on me, financially, so I answered truthfully.
They said that this would not be in line with any T&C's of the lenders and advised I stop the process.
Now I am left with the awkward situation of having to deliver this news.

But I would still like to help her get a property, if possible.
Are there any known providers I can point her in that will help people with outstanding IVAs?
Or ny other advice for someone in my position?

njkmr

Thankfully your honesty has saved you from years of misery.
It is never a good idea to rent a place to family for friends.
Your sister sounds like a nightmare tenant to be honest, without me trying to sound nasty.
She needs to take responsibility for herself.
Tell her straight and be thankful you are an honest person that has escaped unscathed from this one.

Mark_d

Buying a BTL and renting it to your sister is messy, even if you were able to get a BTL mortgage on top of your other financial commitments.  You be paying extra in stamp duty, you'd be paying a higher mortgage interest rate on the BTL mortgage and you'll be taxed on the rental income.
How old is your sister?  It's so long since I've heard anyone cry, saying "I want..."
With an IVA you sister is saying she's unable to pay interest on her existing debts...but she has the means to pay interest on a mortgage?
I think your sister needs some tough love here.  She needs to prove that she can be trusted managing smaller financial commitments before she has any hope of something bigger

gwynlas

She should have asked for your help at the time she received her share of inheritance to use that for a deposit.so she's missed the boat

Even if you were to get a BTL mortgage you cannot let to family.
The interest rate would be higher than a standard mortgage.
You would have to accept landlord responsibilities including perhaps registering with local authority.
You would be taxed on any rental income.
The current government are also planning a raft of reforms re private lets.

If she could afford to pay the mortgage would she meet eligibility requirements to get one in her own name?

silvercar

I think you are now in a good position. You can tell your sister you tried but it wasn't possible.

housebuyer143

You have dodged a bullet for sure. Tell her it wasn't possible, which you are being truthful here. 
She got loads of money and then didn't pay off her debts on the IVA? I don't think anyone is going to lend to her for a mortgage tbh. It's harsh, but rightfully so because she sounds like she will rack up arrears. 
She is crying about not being able to get a house when she literally blew threw her best shot. You need to step back from trying to manage things for her and she needs to start taking responsibility. 

amnblog

You can tell your sister that a mortgage broker has told you that this is not legal and that should end this problem for you.

BonaDea

The more that people dig her out of her messes, the longer it'll take her to learn not to create them.  The kindest thing you can do for her now is to back away so she has to try and sort herself out.   

Ksw3

I'm really sorry for you loss. It's commendable that you want to help your sister but I often find it's much better not to get involved in ways that would make it hard for you to step back, whether that's a mortgage or gifting more money than you can spare. 

If your sisters goal is financial independence then facilitating this request (or some form of it) will not encourage a change in her attitude to money until a light bulb moment happens. She may be thinking it's unfair that different outcomes have been reached from the same inheritance but not acknowledging the circumstances and attitudes that led to it. That's really for her to address. 

I hope she takes the news well. It can be very difficult when grieving, as you can feel compelled to keep the family you have left closer at all costs, even at times to our own detriment. 

Zerforax

I would not tell your sister that you were declined because you were "honest about the situation" regarding letting to family. I would just say you were rejected and the broker said it is highly unlikely that someone else will lend to you.

RedFraggle

You could also offer to help her budget? Maybe using one of the good budget apps such as YNAB and paying the subscription for her?  That might satisfy your desire to do something concrete to help whilst assisting her.