House purchase

[Cafesue]

Because of personal circumstances, I shall have to move back closer to my son and daughter, but will have no home to go to. There is no way I can get a mortgage (due to age and will not have a job) until i can get one. I was thinking my son could get another mortgage in his name (he already has a home) and we could rent the house out for a few months until I can get moved, so the rent could pay for the mortgage. Then I can move and get a job to pay for the mortgage myself plus I will have a lump sum to pay some of the mortgage off from my current property. Are there any hidden problems with this?

[Zacs-Master]

I was thinking my son could get another mortgage....
Really, have you asked him how he feels about this?

[ubasses]

Well it will not be that staightforward. Which house are you thinking he will take the Mortgage on? If it is the new one, the mortgage company would probably only offer a Buy to Let and he would have to prove that he would receive enough rental income to cover the repayments. If there is enough equity in his property he could perhaps request an equity release loan in which case he would only have to prove he could manage the repayments from his income. I am afraid any future potential income from you he tried to use would not be taken into account as it would not necessarily materialise.

[boxtops]

He might not be able to get a mortgage - the debt will all depend on his income, and his ability to service two mortgages (even though that's not what you intend). It's far more difficult to get a mortgage these days. I'd try your own bank if I were you.

[Buenchico]

Your son would require a commercial ('buy-to-let) mortgage. Because it was defaults on such mortgages which largely led to the banking crisis, they're hard to get with large deposits (typically 30%) required, high rates of interest and evidence of substantial income needed.

Renting out properties involves meeting loads of legal requirements (e.g. placing deposits in a bonded scheme and getting safety checks carried out on gas and electrical appliances). Any profit made after making the mortgage payments (and necessary expenses) would be taxable. Landlords risk losing money during periods when they can't find a tenant.

You couldn't simply 'take over' your son's mortgage. You'd have to apply for a new mortgage; that could prove to be difficult until you'd been in your new employment for at least a year. (That, of course, assumes that you can actually find a regular job. I've not managed to during the past 7 years!).

Chris

[Maggoty]

I have just moved my mum into the house next door to me. I am single and got a buy to let mortgage on that house and we rent out my mum's old house. The rent we get for that more than covers the mortgage on the new house - with money left over. In fact my mum is £400 (minus whatever take she will need to pay) a month better off. My brother is fine with the house being in my name as he knows I won't end up 'stealing' it.

The only thing I would advise (and I was advised this) is not to mention to the mortgage company that the buy to let is for a relative to rent out. apparently for some reason they don't like that and often refuse on those grounds.

Also the buildings insurance on my mum's new house is a little bit more expensive as its a buy to let insurance - other than that its all worked out very well for us all.

Good luck

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