Call us on 0344 346 3672
or arrange a callback

Can I rent out my home, and buy my parents house to live?

Posted on 17 February 2014 by George


Can I rent out my home, and buy my parents house to live?

Hi there, Can I buy my parents house and keep my own. My house is worth 240K and have a 90K mortgage. My parents house is worth £500K with a £50K mortgage. They are willing to sell me theirs for £240K (price of my house) and then live in a static caravan and pay off the £50K they owe. Is there a way I can keep my house, rent it out to cover cost of my current mortgage, buy my parents house with a new mortgage and still give them the £240K? equity release on my house?

George,

You are describing what we call in the industry a 'Let To Buy' situation. This is where a client raises capital against their current home, with a buy to let mortgage, and uses that to go towards the deposit on their new home. We are finding that this is increasingly common, and we have access to a number of residential and buy to let lenders who are comfortable with this arrangement.

As preparation it would be useful, for you to have an idea of what the monthly rent would be on your current home.

If you would like to discuss this in more detail then please contact one of our mortgage experts on 0344 346 3672.

Regards,

Simon

More than mortgages, talk to me about:
Financial Protection | Investments | Personal and Corporate Pensions | Home Insurance
General Insurance | Valuations | Conveyancing | Wills | Home finders

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.


Legal

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY DEBT SECURED ON IT.

John Charcol is a trading name of John Charcol Limited and its Appointed Representatives. John Charcol Limited is authorised and regulated by the Financial Conduct Authority. The Financial Services Register number is 665649. Registered in England No. 9157892. Registered office address for John Charcol Limited is 5th Floor, Cutlers Exchange, 123 Houndsditch, London, EC3A 7BU. The FCA does not regulate some investment mortgage contracts. Calls may be recorded for training and monitoring.