Posted on 10 April 2012 by Tracey
We are looking to buy a piece of land with OPP for semi-detached houses, one for us and one for our Son. What is the best way to finance this as my son cannot get a mortgage on semi detached and we shall be mortgage free. Help please.
Are you looking for finance to buy the land and build the two properties or are you looking for a way to recoup some of the expense by selling one of them to your Son when they are finished?
In the first instance there are lenders who will consider lending to you on a self build mortgage. With these you normally have to be able to afford to buy the land and fund the build until the foundations have been completed, although there are a few who will consider lending against the value of the plot. You will then receive between 4 - 6 stage payments timed to coincide with completion of the build as it progresses. These may be paid in arrears, once the work has been completed which may cause cash flow problems or in advance so that you can proceed with the next stage. This is by no means the only way to fund the build and you should seek specialised independent mortgage advice before proceeding.
If it is just a case of your son not earning enough to support a mortgage then it may be possible for you to act as his guarantors. In this scenario you would contract to the lender to ensure that all mortgage payments are paid in full and on time until your Son's income is sufficient for you to be released from your obligations. Not all lenders offer this arrangement and it also depends on your Son's future prospects, most will not accept guarantors if they feel that he will not be able to support the mortgage on his own within a reasonable timescale.
I believe we can help you and that you would benefit from speaking to one of our independent mortgage advisers. Please call 0344 346 3672 and tell the consultant the date and title of your question, they will then be able to help you find the right mortgage for your situation.
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.