Mortgage- Buy-to-let or first time buyer?
by Felixx on Thursday, June 10th, 2010 | 4 Comments
We are in the UK.
My parents have got a house on mortgage already but want to buy another house so we could let it (rent it). I work nearly full time and live with them.
When we look at mortgages, there are different mortgage rates for "Buy to let" and "First time buyers". We know we should go for Buy to let mortgages but if I want to buy it along with my dad/mum, that could mean we can get the first time buyer rate. If we do that, but rent the property later, will there be any legal problems/obligations???
Any serious answer would be appreciated. Thanks.
In the U.S. a first-time buyer mortgage is only obtained if the buyer occupies the home for the first 2 years (usually). You'd have to check into how the laws are written where you are, but generally those loans are there to help people buy a home to live in - not for investment properties.
Yeah I would say the first time buyer rate is the best....
Here I googled a page for you that talks about mortgages and hope it helps you.
http://www.livingpress.com/articles/money/homeloan/homeloan.html
First time buyer rate will be best...
There are 3 Mortgages options available to you as follows:
1. Where your parents could act as Guarantor for you to ensure that the lender would be guaranteed to be paid by your parents if you cannot afford the loan on your own.
2. Joint mortgage with your parents, this would be allowable so long as the existing commitments plus the new mortgage are affordable to you all.
3. Buy to Let mortgage, again you should check with the lender to ensure that they are happy for you as a family member to occupy the property as some have rules that don’t allow this.
If you intend to change the status of your residential property to a Buy to Let, you should first check with the lender about this, as some do not allow (or offer) Buy To Let loans as part of their lending policy. This could therefore infringe their rules and they could demand full repayment of the loan back to them immediately, which would put you in a very awkward position.
Only the daughter in her own right would qualify for any First Time Buyer rate because the parents already own a property.
Disclaimer:
The answers above are for guidance only and should not be acted upon without you receiving professional mortgage advice relevant to your circumstances. To find an independent mortgage adviser please go to http://www.unbiased.co.uk