Help - i want 2 buy a house but i'm all confused!!!

rakesh_2

Hi all

Hope u guys can help. At the current moment i live with my parents and they are willing to transfer the house under my name as i have just payed their mortgage for them. Considering the house is now "free" i want to buy another house for me to live in. At the current moment i have seen 2 houses which i am interested in - one of them is priced at £159,950 and the other one is priced at £169,950. Considering i cannot afford either of the houses on my income alone (most mortgage lenders that i have spoke to so far say they will only lend on income multiples) is it possible to take out a mortgage and use our current house as security. if this is possible:

1. how do i get some more information on getting a mortgage and place the house as security - r there any websites i can have a look
2. which mortgage lenders offer such an opportunity
3. what are self-certified mortgages? - and could this b another option?
4. what role can my parents play in acting as guaranters - although they aim is to retire early at ages 58 and 59 and my mum will ideally working part time
5. is it wise to transfer the house under my name? if i put the house under my name soley do i still get first time buyer status?
6. are there any other options?

Thank you in advance

meanmachine_2

My parents own their house. So what?

You want to secure one house against another, thereby risking both?

My advice is: wait until you're earning more, or have saved up a bigger deposit, and/or wait until you're in a relationship so you can pool your income.

You can't get a mortgage because you don't earn enough. Sorry.

Join the club mate. It's rough, isn't it?

You could self cert, like some of my mates, but they can barely afford their repayments now, so they'll likely be repossessed should int rates rise in the next few years. Do you want to put yourself in that position?

EDIT: For larger income multiples, try Abbey or Northern Rock. They seem to have insanely lax lending criteria based on "affordability".

lush_walrus

I agree with meanmachine, there is a very high risk attached to your plans and I think the best advice anyone can give you is that if you can't afford it, don't have it!.

With regards to transfering your parents house into your name, then buying another and will you still be a FTB. Whether you are FTB or not isn't going to gain you anything in the property chain, what will is the fact that you have nothing to sell, and therefore if you do decide to buy somewhere will be the start of the chain. If you do transfer your parents house into your name, then you may well avoid inheritance tax if your parents are still alive in 7 years and you carry this out in the right way (im not great on Inheritance Tax, but definately there are people on here who can tell you very good info). But, you will incure capital gains tax on one of the properties when you come to sell them. If you have one property you do not have to pay CGT, but for anything above the one and not considered to be your primary residence then tax will be due on the increase in value.

With regards to borrowing more than the standard, I wouldnt advise this either as ultimately youare borrowing more than you can afford. Yes many people do it, but guess who are the first to loose their property when recession hits, interest rates hike up or unemployment rises! The fact that you want to borrow against your parents house increases the risk even further.

Like meanmachine has said, simply wait till you can afford something, or if you really are set on buying beyond your reach, then make sure you have a plan in place to help yourself fund the mortgage, ie: extra jobs, renting a room out.

Pinkleylandii

Hello

From a female perspective, you obviously want to move out of the home but finances dictate you cannot afford what you like. You say you have just paid off your parents house and I wonder do you have any collateral left. You may not have the income at the present moment in time to buy a property to live in but if you do want to get on the property ladder for yourself as no doubt your parents will around for a long time, it may be worth considering buying a buy to let property to rent out. Your figures i.e. rent would need to be 130% more than the mortgage interest payment and there is others expenses to take into account but if you could get the deposit you can get buy to let mortgages at 85% LTV i.e. £100,000 mortgage deposit £15,000. You can obtain these mortgages not based on your income but based on the price of the property and the rental income anticipated (this would have to be agreed probably from a mortgage lender surveyor). You would need to do your homework to make sure you target a certain type of person who would want to rent the property. i.e. buy a flat near a university targeting students. I would advise if you decided to go this route to obtain specialist help in sourcing a property. Each year hopefully the property would go up in value and the mortgage payment would be paid by the tenants. Again specialist advise on the risks and the potential benefits would be very important. If you went this route and still lived at home in say a few years down the line you may have more income and the property you bought may have went up in line with property you would like to buy for yourself and you could sell this and put a downpayment for a home for yourself. This does have Capital Gains Tax implications. Elaine

rakesh_2

Thanks to the replies so far...

I have been doing some research on the internet and so far i am still confused lol. What i am thinking of is putting our current house (under my name only) and use it as security in buying another house for myself to live in and then renting some of the rooms 2 help pay the mortgage. But i really cannot find any lenders who would lend in this way....does anyone know of such opportunities of such lenders????