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Mortgage required - for a dependant relative

Last post Thu, Aug 24 2006, 12:48 PM by Louise Cuming. 1 replies.
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  •  Thu, Aug 24 2006, 12:48 PM

    Re: Mortgage required - for a dependant relative

    Hi - There are no options for you to purchase a property to rent out on a 100% basis - but there are a couple of alternatives to explore.

    Firstly, if you have some equity in your own residential property, you could release some capital either with your existing Lender - or by remortgaging to an alternative Lender and increasing your mortgage. The latter option would probably give you a wider choice of mortgage products. If you release enough for at least 25% deposit, you will then be able to shop around for a buy to let mortgage. However, it is worth taking advice as not all Lenders are comfortable agreeing Buy to Let mortgages where the prospective tenant is a relative. You will need to arrange an assured shorthold tenancy agreement and the market rent would need to cover the mortgage payments at a level specified by the Lender. This is usually about 125% of the interest only mortgage payment at a specified interest rate.

    If your daughter is earning a salary, a second option could be for you to buy a property jointly. For example the 1st Start mortgage with the Bank of Ireland is designed for just this scenario. With 1st Start you would enter into a joint mortgage with your daughter taking both incomes into account to help you borrow more – up to 100% of the value of your chosen property (for loans between 95% and 100% of the property value, the parent must have held a mortgage for 3 years or own an unencumbered property).

    I hope that gives you some food for thought. What would children do without us parents to help them out!

    Louise

    • Post Points: 5
  •  Thu, Aug 24 2006, 11:59 AM

    Mortgage required - for a dependant relative

    Hi there,
    I am looking to buy a house for my daughter to rent from me - on a proper basis but I expect to make a loss on this. I need a 100% mortgage for this. What are my options?
    • Post Points: 20