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Original poster

Taking over a mortgage for grandad: any idea what he’s on about?

17 replies

Bishalisha · 02/01/2019 10:21

Hey all

I hope someone can help. My grandad will be abroad for the next 3 months so I can’t discuss this directly with him atm.

My grandad is trying to ‘sort’ his grandchildren out. He’s sorted out most of us with in various way with just 2 to go. He owns a number of BTL properties.

He mentioned to my mum the other day about if I can get a £130k mortgage then he will transfer one of the properties to me. The property is currently worth more than that and already has tenants. Obviously this is now 3rd hand information so may not be as correct as that.

Does anyone know what he’s on about? So I can start looking into it for when he returns?

Thank you

OP posts:
endofthelinefinally · 02/01/2019 10:24

You need to find a specialist BTL mortgage advisor. Is the property already mortgaged? If so, the current lender would be the place to start.
If not, you need to find a solicitor specialising in BTL properties.

endofthelinefinally · 02/01/2019 10:26

I imagine he has a portfolio based on BTL mortgages. In order to transfer to you, you will need your own mortgage arrangement and life insurance.

Original poster
Bishalisha · 02/01/2019 10:27

Yes it’s already mortgaged. I think that may be the value of the mortgage he already has. I’m not 100% sure. I think the motivation with it all is for IHT purposes (total estate £3m+) if that gives it a bit more context

OP posts:
HermioneWeasley · 02/01/2019 10:28

Also, if he dies within the next 7 years there will be inheritance tax due on the gift. Are you in a position to take on an additional mortgage and the responsibility of tenants?

dementedpixie · 02/01/2019 10:30

Do you want to be a landlord with the responsibilities that entails?

SillySallySingsSongs · 02/01/2019 10:30

If he is trying to 'avoid' IH then it could well backfire for example if he dies within the next 7 years.

billybagpuss · 02/01/2019 10:32

The usual deposit for BTL mortgages is 25% so you'll need to get a valuation on the property and hope that it has that that much in it.

Original poster
Bishalisha · 02/01/2019 10:40

The properties are already managed with tenants so I think it wouldn’t entail too much (I hope!). I doubt I would even be able to borrow that much on my own to be honest

OP posts:
SillySallySingsSongs · 02/01/2019 10:59

The properties are already managed with tenants so I think it wouldn’t entail too much (I hope!)

It does entail quite a bit. Do you have money for repairs etc. Can you pay off the mortgage repayments if your tenants miss a mortgage payment. Do you have the money to for example, replace a boiler or leak? Have you looked at insurance?

I think you are in for a shock.

Ta1kinPeace · 02/01/2019 13:40

He needs to get his accountant to sort this.
If he does not have an accountant / Financial advisor he's a fool.
Find him one and get them to navigate the legalities for you.

mumsastudent · 02/01/2019 13:51

if you have agent - deduct about 15% a month, landlord insurance (much higher than normal - think a good proportion of a month per year. servicing boiler every year (& fixing it if it goes wrong), if tenant leaves - you will have a void period (ie a month or so without rent) & it will need redecorating (at the least!!!), you will need the electrics/plus electrical equipment tested, anything goes wrong from taps, fences, & so many things I cant think of top of my head! you pay. I reckon you need to think in terms of receiving 10 months a year (not counting deductions of agents fees!)

USn00zey0ul00ze · 02/01/2019 14:31

If you are a landlord (don't live in the house) you will need to either manage the property yourself or get an agent to do some of the work for you. However, you will need to pay landlord insurance, electric and gas safety checks, repairs, agency fees etc. You will also need to pay tax on the income and fill out a tax form with HMRC, even if you make no profit, you need to declare the income. You would need a solicitor to put the property into your name. Still interested ?

USn00zey0ul00ze · 02/01/2019 14:32

If the property is empty you will still need to pay the council tax

Original poster
Bishalisha · 02/01/2019 17:25

Haha can’t say I’m very interested! Grin

He does have an accountant and a FA but again as this was a comment he made to my mum and second hand from my mum to me I haven’t spoken to him about it! Doesn’t sound like anything that’s remotely feesable for me atm from everything mentioned above though!

OP posts:
endofthelinefinally · 02/01/2019 20:24

I doubt he is a fool if his estate is worth £3m.
OP, I am sure he has a solicitor, accountant, FA, mortgage broker and managing agent.
Just talk to him.
He is sensibly sorting out his affairs and probably making a will.
If he wants to leave you a property that is generous of him. You can always sell it.
At least look into it, if only to make sure the tenants have some security and continuity.
Nobody on here actually knows the real circumstances and neither do you.
I am sure he is capable of writing an email.

Original poster
Bishalisha · 02/01/2019 21:09

I am sure he is capable of writing an email

He is absolutely NOT capable of writing an email Grin. I break out in a cold sweat when I think about the keefuffle caused when Facebook wanted him to accept their terms and conditions 😂

OP posts:
Ta1kinPeace · 03/01/2019 11:47

Bisha
THe thing to do is to chat to him and suggest that he gets his advisors to start some proper tax planning and contact you through that :-)

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