Buying Parent's Property

Posted on 5 May 2010 by Scott arthur


I currently own a flat worth £110000 with an outstanding mortgage of £88000. I would like to also buy my parents house which is worth £150000 but they are selling it to me for £120000. I earn around 50k self employed could I remortgage the flat to buy my parents on buy to let or put my flat on buy to let.

 Sorry for the long question I'm just a little confused.

Scott

I can understand your confusion and hope that I can help simplify this for you.

There are very few BTL mortgages available above 80% loan to value, which is the level of your current residential mortgage on the flat. Whilst it would be possible to remortgage the flat on a BTL basis it would not raise any more funds to help you buy your parents house. This means that you will have to raise a mortgage on your parents property.

The type of mortgage you raise will depend on who is going to be living in the property? If it is your intention to stay in the flat and rent out the house then you will be looking at a BTL mortgage. If you or your parents are going to live there then a Residential mortgage would be in order.

I recommend that you speak to an independent mortgage broker about your situation

 

Peter

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