Buying From My Landlord
Posted on 7 February 2011 by Michelle
I have been living in my landlords house now for about 4 years and he now wants to sell it. He has given me first refusual and I want to buy it, but I am not working.
He has a £40,000 interest only mortgage, I would like to get a capital & interest repayment mortgage, he owes £141,000, to pay it off. He said he would loan me a written loan of £40,000 to allow me to get on the mortgage ladder which I would have to give back to him when I sold it. I would repay the mortgage by renting the rooms in the house,which is near a very popular seaside town. Can you help me, or guide me in what I may do to get a mortgage? I would be buying the house, running it and when I got it up and running I could come off my benefits, become self-sufficient and not rely on government funding for my income. Please help, I really do believe I can do it or I wouldn't be wasting my time or yours.
Whilst I am a bit confused about how much your Landlord owes, I think that he would lend you the deposit of £40,000 and you would need a mortgage of £101,000 to buy the property? Reading between the lines it sounds like the property is larger than you would need on your own and that you would be running it as a Guest house or similar.
I don't think that you will be able to get a standard residential mortgage for various reasons, but chiefly your reliance on Government benefits and the type of property. It might be possible to obtain a Commercial mortgage to enable you to run the property as you wish, but I do think that this is a long shot. You would need to be able to present a sound business plan based on and future current rental demand, your Landlord should have records to help you with this and present it to your local Bank Manager when applying for the finance.
A good independent mortgage broker with experience of commercial markets would also be able to help you put together a business plan and know which Lenders to approach to give you a greater chance of being successful. I recommend that you speak to one before contacting your Landlord so that you know exactly what information to get from him.
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