Buying a house for my parents

by Readers Question

18:16 PM, 6th January 2014
About 7 years ago

Buying a house for my parents

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Buying a house for my parents

My parents were declared bankrupt over 4 years ago and I am now in a financial position whereby I can purchase a house for them to live in.

I am aware that a rental agreement will have to be put in place and I will have to get all of the relevant landlord insurance etc.

The question is am I eligible to get a normal mortgage or because I would not be living in the property, do I have to get a buy-to-let mortgage. Buying a house for my parents

Any advice would be greatly appreciated.

Many Thanks

Patrick


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Comments

Mark Alexander

18:17 PM, 6th January 2014
About 7 years ago

Hi Patrick

What you will need is a regulated buy to let mortgage.

I have sent you an email and cc'd my recommended mortgage broker 🙂
.

18:40 PM, 6th January 2014
About 7 years ago

It depends if your parents are paying rent.

If you have the income to purchase a second home, just buy a 2nd home on a residential mortgage.

If they are living there, but not paying rent, it's not a BTL scenario.

We bought a 2nd home about 5 years ago on a resi mortgage with a financial contribution from my parents in law as they wanted to use the property occasionally as it was in a holiday area. When my husband's Mum died, we moved his Dad in there permanently. He does not pay any rent.

However, he pays the council tax, utilities, maintenance etc.

The arrangement has so far worked well and we created a Deed of Trust to explain the arrangement and everyone's interest in the house.

We regularly visit the house and the Council Tax is in the joint names with my father in law, and the lender is aware of this and has no issues.

Gary Nock

17:31 PM, 7th January 2014
About 7 years ago

Hi Patrick

The advice you have had from Mark and Vanessa is spot on. Whatever the situation becomes either your parents live there rent free or pay rent, do not get tempted to go for a residential because it's cheaper and easier to get rather than a BTL mortgage. Many lenders do not let you have a BTL mortgage and let to family. Landlord Insurance can also have several exclusions. If things ever went pear shaped with the tenancy or the relationship then things have the propensity to rear their ugly head. Go straight down the line Patrick whatever scenario you decide upon and sleep well at night.


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