greg1040 Posted January 6, 2014 Report Share Posted January 6, 2014 Right so i may possibly be able to buy the parents house on the cheap up to 75k off i believe or 60 percent. This seems a decent investment for later in life since the rents have no interest in buying the house. shall be finding out more about price ect tomorrow. Anyways anyone in the know on how this will effect me come time to buy my own property possibly a year down the line? Quote Link to comment Share on other sites More sharing options...
Pashley26 Posted January 6, 2014 Report Share Posted January 6, 2014 http://lmgtfy.com/?q=Property+solicitors Quote Link to comment Share on other sites More sharing options...
shercofray Posted January 6, 2014 Report Share Posted January 6, 2014 (edited) It depends whether you're going to buy it cash or wth a mortgage? If you're purchasing it purely as an investment and using a mortgage you'll need a buy to Let mortgage. The maximum LTV you will be able to get is 75% (there are some 85% products but you won't qualify). One thing to note, as you're buying the btl first you're mortgage products available will be a lot smaller. Most lenders prefer you to have a residential mortgage first. However with a good broker you should be fine - I can put you in contact with one if you need. Have you thought about buying it on a residential mortgage and living there? Then a year down the line you will be able to remortgage onto a btl product and move out? This will increase products etc. There is usually a minimum income requirement of 25k per year for btl mortgages for the larger lenders so this may be something that will cause a problem (I don't know you're personal position). With regards to the impact it will have on you getting a resi mortgage after, this should have little impact. Btl lenders look more at whether the business is viable and take into account the rents you will receive, whereas resi's purely look at your income. Having a btl first will help the resi mortgages you can get due to helping credit rating etc. Have you thought about the responsibilities of being a landlord? If the property is sat empty for 6 months will you be able to afford the upkeep? There's a lot more to think about than just it's cheap so it will be a good investment. Is there the demand for the type of property in the area? Hope that helped, I'll check with someone at work about IHT issues involved in this. Frazer EDIT: I've re-read what you put, are you planning to purchase this from the landlord your parents currently rent it from or from your parents? Basically, definitely buy it if you're certain it is 75k below market value, even if you sell it in the future you will make your money back - alternatively you can buy it re-mortgage in 6 months time back to 75% and pull £87,500 out of the property tax free. Edited January 6, 2014 by shercofray 2 Quote Link to comment Share on other sites More sharing options...
Ross McArthur Posted January 6, 2014 Report Share Posted January 6, 2014 Right so i may possibly be able to buy the parents house on the cheap up to 75k off i believe or 60 percent. This seems a decent investment for later in life since the rents have no interest in buying the house. shall be finding out more about price ect tomorrow. Anyways anyone in the know on how this will effect me come time to buy my own property possibly a year down the line? Best give Towler a shout 1 Quote Link to comment Share on other sites More sharing options...
ben_travis Posted January 6, 2014 Report Share Posted January 6, 2014 if you can get a property in aberdeen at 60% the price Greg you'd be STUPID not to....the rental market (especially in that part of town) is so darn lucrative that you'd make it back in no time. If you can prove in the future that you have guaranteed rental on the folks house, then you look to buy yourself in the future then so long as you have a decent deposit you should struggle. RICH b*****d!!!! Quote Link to comment Share on other sites More sharing options...
greg1040 Posted January 6, 2014 Author Report Share Posted January 6, 2014 The way it works i think since my parents have been council tennants for x amount of years they get such a big discount off purchasing the house. Theres still alot i need to look into but i wont be living there would still be the parents for many years to come it would just be an investment for later in life. But i earn plenty over the 25k so this shouldnt be a problem for getting my own property. I had a feeling it would have to be a buy to let after speaking to towler a while ago about this. Thanks for the advice shercofray thats what i was looking to hear. If only i was travis. Quote Link to comment Share on other sites More sharing options...
shercofray Posted January 6, 2014 Report Share Posted January 6, 2014 No worries - hope it made sense. Is it possible for you to buy it? As I thought it was only the tenant that had the option in this scenario? Or are you looking at purchasing in your parents name and transferring to you? If this is the case I'll fill you in on all the issues with doing it that way. Quote Link to comment Share on other sites More sharing options...
greg1040 Posted January 6, 2014 Author Report Share Posted January 6, 2014 Well that was another thing i was going to have to look into im not sure on how i would go about buying it either since i currently rent my own place. I think for me to get it myself i would need to have lived with my parents for a year then i have the right to purchase it with the discount aswell. Could i for instance say i was buying the home for my parents but put the mortgage in my name? any details on going through my parents to buy the property would be great Quote Link to comment Share on other sites More sharing options...
Sam Nichols Posted January 6, 2014 Report Share Posted January 6, 2014 I don't know nothing about anything but it sounds dodgy as f**k to me! If you had the cash, you could gift it to your parents and let them buy it, but since the discount will only apply to them, there's no way you'll be able to buy it yourself. I doubt you'd get a mortgage on the house since the house would have to belong to your parents for the discount to work, which means you'd have nothing to secure against the mortgage, unless you already own a property and remortgage it? Quote Link to comment Share on other sites More sharing options...
shercofray Posted January 6, 2014 Report Share Posted January 6, 2014 (edited) The renting your own place wouldn't be an issue as there are btl products available for people who are first time buyers. I've just emailed someone to check your second query re the mortgage. If your parents bought it in their names, they would then be able to gift this property to you. The only issue there would be is if they are liable to inheritance tax (estates with a value over £325k) as with gifts the donor has to live for 7 years for this to be a true gift. This all depends on whether you parents are above the 325 limit. EDIT: I've just checked this with the tax manager at work and I was wrong; if your parents continue to live there it would fall part of their estate and be liable to IHT. I think there is a rule that once you buy a property from the council at discount you have to live there for a certain length after (5 years I think) before you are able to sell - I assume this will be the same with gifting. Let me know if you want any more info. Edited January 6, 2014 by shercofray Quote Link to comment Share on other sites More sharing options...
Sam Nichols Posted January 6, 2014 Report Share Posted January 6, 2014 What if he marries his Dad? 1 Quote Link to comment Share on other sites More sharing options...
shercofray Posted January 6, 2014 Report Share Posted January 6, 2014 I don't know nothing about anything but it sounds dodgy as f**k to me! If you had the cash, you could gift it to your parents and let them buy it, but since the discount will only apply to them, there's no way you'll be able to buy it yourself. I doubt you'd get a mortgage on the house since the house would have to belong to your parents for the discount to work, which means you'd have nothing to secure against the mortgage, unless you already own a property and remortgage it? It's not dodgy this is a pretty normal situation. He's stated he doesn't own a property so won't be able to do that. Quote Link to comment Share on other sites More sharing options...
greg1040 Posted January 6, 2014 Author Report Share Posted January 6, 2014 The 325k wouldnt effect me so thats fine. Yeh u need to live there for 5 years or they can ask for the discount back or a percentage of it. All great info guys thanks for the help. Quote Link to comment Share on other sites More sharing options...
Sam Nichols Posted January 6, 2014 Report Share Posted January 6, 2014 (edited) I don't understand how you can get a mortgage for a property that isn't yours/won't be yours and get the house at a discounted rate that doesn't apply to you. Edited January 6, 2014 by Sam Nichols Quote Link to comment Share on other sites More sharing options...
N.Wood Posted January 6, 2014 Report Share Posted January 6, 2014 Do you have kids? If you put in their name you can probably get around the buy to let thang. Quote Link to comment Share on other sites More sharing options...
greg1040 Posted January 6, 2014 Author Report Share Posted January 6, 2014 Well thats the reason i would have to look into going through my parents or 1 other way i can think round it would be to put my name back on the house for a year the i think am entitled to buy it with the discount. This is just an idea i had still alot to look into. Just wanted some advice from others who had maby gone down this route.Nah no kids too young for that lol Quote Link to comment Share on other sites More sharing options...
shercofray Posted January 6, 2014 Report Share Posted January 6, 2014 Well thats the reason i would have to look into going through my parents or 1 other way i can think round it would be to put my name back on the house for a year the i think am entitled to buy it with the discount. This is what me and my manager came up with, do you live/work in the same town the property is? As they'd have very little proof to prove otherwise if yes. Quote Link to comment Share on other sites More sharing options...
greg1040 Posted January 6, 2014 Author Report Share Posted January 6, 2014 Yeh i work in the same town the property is at Quote Link to comment Share on other sites More sharing options...
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