I want to buy a home for my mum, it will be 40% LTV and I don't plan to charge her any rent.
Trying to avoid going down the regulated buy-to-let route.
The mortgage broker I was speaking to earlier said I can just take out a regular residential mortgage and let her live there.
I thought that for residential mortgages there was generally a requirement that the property be used as your main residence?
Anyone bought a home for a family member using a regular residential mortgage and not breaching their mortgage terms?
unless she's had credit problems, put her name on the mortgage too?
Yes I did but it was 10 years ago and things have changed a lot. Lender did ask for proof every 6 months that my mum was still living there.
She died last year and if I sell the property I get hit with a capital gains tax bill which is a bit of a pain in the arse to be honest as I didn't buy it to make a profit and in business terms made a loss over the period (if I was comparing this to buying a property and charging for rent). Not that the tax office will take that into consideration.
Is your own home mortgaged? I don't think you can have more than one residential mortgage, which is why you need to go BTL. Why do you want to avoid BTL? I guess interest rate might be a bit higher, but other than that I don't see why you wouldn't use it. You could even book a loss every year and offset it against your tax bill! Or something like that. (Cue gnashing of teeth).
You can have more than 1 residential mortgage according to Mr Google:
[url= http://www.guardian.co.uk/money/2012/may/16/illegal-two-residential-mortgages [/url] http://www.guardian.co.uk/money/2012/may/16/illegal-two-residential-mortgages
EDIT: Didn't finish that! Vendor discretion appears to be key, so I would chat with the provider see what they say.
That said, I reckon half the rentals out there are bought on residential mortgages anyway, so it might just come down to your 'risk profile' 😉
I work for a big bank. for a res mtg most lenders will ask that it's your main residence, yes. Do you have suffcient equity in your property to release funds to buy the other, would be a cheaper route.