Posted on 15 January 2010 by Peter
I have my daughter, her husband and child living with us. They have been offered a property at a very good discount at £135k valued at £149k. I have a property worth about £250k with a mortgage of £140k. I would like to help them and thought that buy to let with them as tenants might a solution. Both sharing costs and any eventual increase in equity. Most buy to let mortgages seem to require 25% up front and am not sure that I would be able to raise that sort of finance or indeed would not want to use all my liquid assets.
Can you advise
Buy to Let is an option, but as you have already found there are a limited number of mortgage offers around and they all require a substantial deposit. The number of lenders willing to look at this for you will reduce even further because the tenants would be family members.
There are other ways of approaching this, depending on your own and you family's personal circumstances, which are worth exploring. Unless the terms of the discount forbade it, you could consider buying the property jointly or if this is not possible you may be able to act as a personal guarantor for a mortgage in your Daughter and Son-in-Law's names. Either way you would need to take independent legal advice to ensure you fully understand the mortgage covenants you will be asked to agree and to protect your own interests in the property.
I strongly advise you to seek independent advice as soon as you can.
Best of luck
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