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Mortgage for dependent relatives

(7 Posts)
upwardsandonwards33 Sat 08-Apr-17 18:51:17

Does anyone know where my sister and I can get a mortgage for buying a house for my parents? They are providing a big cash amount but my sister and I are eligible to get a mortgage. We wouldn't charge them rent.

delilahbucket Sat 08-Apr-17 19:37:00

See a broker. Do you each have mortgages already? It will be complicated as contracts will have to be drawn up with a solicitor to say who has interest in the property.

upwardsandonwards33 Sat 08-Apr-17 22:55:48

Yes we have mortgages. I have already spoken to a solicitor about it.
I am just wondering are there specific products that would be catered to our needs?

HandbagFan Sun 09-Apr-17 08:16:29

You will need a regulated Buy To let mortgage as you'll be putting relatives in there to live. You will also be counted as landlords even if you don't see it that way so will need to provide gas safety certificates etc, even if money is not exchanging hands. You'll be paying a 3% additional stamp duty as you already own property.

You need to see an experienced mortgage broker / IFA to source the best mortgage deal for you and also to explore the costs so you all know what you're signing up to.

delilahbucket Sun 09-Apr-17 16:20:16

Virgin money used to do a mortgage for this purpose. It must be less than 75% LTV and you will have your income and expenditure checked to ensure you can afford two mortgages.
You cannot get a standard buy to let. Most exclude letting to a family member.
You will be liable for extra stamp duty and also capital gains when it is sold.

upwardsandonwards33 Sun 09-Apr-17 18:22:09

Thanks. Delilah would we still have to pay capital gains even if we lived there for over 30 years? We are buying the house that they have lived in and we grew up in.

HandbagFan Sun 09-Apr-17 22:07:17

Yes capital gains applies - you'd be buying it in order to get the mortgage on it, and at whatever point in the future you sell it you will face CGT on the increase for any time you didn't live there while owning it.

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