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I have received a remortgage offer releasing £150k of equity but only if I buy a new buy to let property from Metro. With the new rental stress tests now, my income is the only way to get this level of remortgage.
The offer states ' The full capital raise amount surplus to any remortgage will be remitted directly to solicitor acting in the purchase of a new investment property. Funds will be released when required for completion, A sale agreement will be required to confirm details of the purchase including full address and agreed purchase price. The retention will be held fora maximum period of 6 months from offer and then no longer available.'
My questions are:
Can this be a joint application to buy a new investment property or not?
Could I buy my dad's flat from him as an investment property?
Many thanks for any advice.
No expert, but
Unlikely. That would require a joint application to be made.
Probably, but it is easy to open several cans of worms by doing so
You should talk to your Mortgage Broker to obtain advice.
Though you should be fine doing a Joint Application.
If your dad is to continue to live in the property - it will be a Regulated Buy to Let and get very complicated.No longer based on stress tests but personal affordability.Talk to your broker if Metro will accept such an arrangement.
_________________________________________________________________________The above post is not financial advice, its often me rambling - passing time on a coffee break.If you are looking for the Best BTL Mortgage? Call the Specialist Team at Bespoke Finance._________________________________________________________________________
First up I have never heard of a mortgage lender making it a condition of the mortgage in the offer via retention that a sale agreement must be in place for them to release funds. This is unusual. For disclosure i have been an IFA and Mortgage Broker for the last 18 years. I am sure they will be ok with a joint purchase however you need to contact Metro Bank to confirm this. If you buy your father's property as an investment property with this £150k then I am sure this will be fine, again a quick phone call to Metro will confirm. If you need to raise an additional mortgage on your father's property to complete the purchase then you need to satisfy the new lenders criteria. As another poster pointed out it depends if your father is going to remain in the property, if he is then this will be classed as a regulated buy to let, the number of lenders you can access will be greatly reduced and your personal income will likely be brought into the affordability equation. You also need to be aware that if you purchase a property from a family member at a price lower than the current market value this will be deemed a concessionary purchase. Most lenders will lend against the purchase price however a few will allow a gifted deposit or gifted equity when buying from family.
Hope this helps. My advice would be to search for a mortgage broker close to where you live.