Soooo. I've had an application for a buy to let mortgage turned down as the companies offering them don't like the fact I went travelling for 8 months last year. Seems odd to me but there you go. So how hard would it be to "give" my cash to someone else who appears more stable and then have them "give" me the house back once the sale has gone through? Anyone know or willing to admit they have done similar.
slighty dodgy legal advice required
I presume you don't want them to "give you" the mortgage back though?
You can easily gift the cash to them. However the mortgage company will credit check the source of the funds and you're back to square 1.
Good point fizzicist.Say the person now applying is on a good wedge to start with and could reasonably be expected to have easily have saved 20 odd grand from their salary for the deposit a mortgage advisor has suggested this option to me. Its the handing over the house or getting it put into my name with the mortgage that is the niggly point I think. Any idea if legally possible, grey areas are acceptable !
They would have to be a pretty good mate to let you put them on the hoom for a mortgage ?
What happens if things go tits up and they are left without the means to pay the mortgage and in negative equity.
Or it could double in value and they tell you to *** off, it's their name on all the papers, what can you do ?
You would have to buy it off the mate/ mortgage company. The house is not your mates to gift to you .
You need to be careful as potentially you would be committing fraud by mis representation if you gained a mortgage by giving false information.
Try and start a dialogue with the provider. Would a larger deposit or a guarantor make a difference?
You properly buy the house from them in future:
*they are at risk for that entire period
*you've given all your deposit to them so will have to raise again from scratch
*tax liabilities associated with gift of cash for deposit
*potentially fraudulent (how will they buy/use house? buy-to-let? principal home? need to make sure whatever terms they are given a mortgage on are adhered to. A good question to ask yourself is "would a lender be happy if they knew what we were planning?" If the answer is no, then be careful )
You somehow manage to come up with a bizarre structure which allows your friend to gift the property to you and discharge the mortgage (I can't for the life of me work out how this would ever be possible, but you never know):
If your friend "gives" (i.e. gifts) you the property and it's not your principal home (i.e. buy to let), you could be on the hook for a hefty CGT bill when you resell the property. Definitely worth checking out.
For example, if you purchase a buy-to-let property for £200k and sell at £250k, then your taxable part of the sale would be £50k.
However, if it's gifted to you and then you sell at £250k, then your taxable part of the sale is £250k.
The whole thing is as water tight as a siv. Non starter.
Try another lender? The BTL mortgage market is pretty good right now.
Also try using a broker, they come into their own If you have unusual circumstances as they usually know which lenders to go to / have lower acceptance criteria
Edit. This is one of the more bizarre posts I've seen on STW
I seriously hope a mortgage adviser did not suggest this to you! As already said, it's a non starter, and I'd ditch your "adviser" if he did tell you to do this.
Surprised that you were declined a BTL mortgage on the basis that you went traveling last year! If you are employed, have a good deposit (25%) and the rental yield stackes up then I'd say there is something else...
I dont get this, how is it that you are going to get the mortgage? They are personal and dont come with the house.
More holes than a Swiss cheese. But yeah you can not take out a mortgage on a house you don't own.
Invest in something else IMO.
Not worth trying to defraud or cheat, open to being done over by a mate who may not be so trustworthy when £000's are on the line.
Thanks chappies, good answers. I am off to see another advisor but dont have spare time at the moment to make an appointment. The advisor is a "she" not that it matters. They insisted it was because I was off travelling which did seem a very odd reason to me as rental yeild, valuation etc all stacked up fine and deposit was not an issue. Dont really fancy fraud on this level but always fun to work out if it can be done.The application to get a mortgage to buy the house was turned down I hadn't bought the house yet. My mate is bombproof as far as I'm concerned and has had my life in their hands many times. It's Mrs Marin and she's my climbing partner as well. Perhaps I should start another thread on how many friends do you have you can really trust?
Thanks again and yes I will be keeping it legal.
My mate is bombproof as far as I'm concerned and has had my life in their hands many times. It's Mrs Marin and she's my climbing partner as well.In that case why not go for a joint mortgage and joint ownership of the BTL? Which would be perfectly legal, and nothing to stop you buying out her share later if there was a reason to do so.
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