Can I Buy A House For My Children

[ottosump]

Hello group, can anyone advise if it is possible to buy a house for my children, initially I am looking to purchase a property for my daughter, paying the deposit required, then have her take up the mortgage payments, I went to speak to a mortgage advisor a short while ago and he was very reluctant to offer me anything, in fact he persuaded me not to bother as he said it would affect my house buying in the future (we were in rented, we have now bought) Can anyone advise if its possible and what would be the best type of mortgage to go for, ideally I would like the deposit as low as possible then I can buy another home for my son in the near future.
Kind regards Otto, in a damp West Cumbria

[factor-fiction]

If you only want to pay the deposit and leave them to pay the mortgage payments I'm not sure why you just don't give the deposit.

[ottosump]

My daughter still training to be a dental nurse, as such she has very little income and don't think she will qualify for a mortgage, my son is in a similar position, he is in his second year apprenticeship. I can easily afford the payments should they default but would like it for them to be responsible for the payments.

[factor-fiction]

If you take out a mortgage for your daughter I doubt any lender would give you another mortgage for a property for your son, unless you have a large income and secure employment or other guaranteed income.
I know you have quite a bit of savings (you had a thread about an £84K savings account) but to get one or more mortgages you'd need to have an adequate steady income. It also depends on your age- if you take a 25 year mortgage how old will you be when it finishes- if 70+ you may find the lenders turn you down.
There can also be issues over capital gains tax if you buy two houses.
I would ask mortgage providers for advice but i think the best bet is to give a big deposit using most of your spare cash and then leave them to stand on their own two feet. If no-one will lend the money then they should rent until they can afford a mortgage

[ottosump]

Thanks for the advice, the houses I am looking for are quite cheap in our area, 35-55k with work needed. I was thinking about a buy to let mortgage, would I still have to pay capital gains on this?
Regards Otto

[puzzled54]

I think you can help with the deposit and then act as guarantor for the mortgage in case your children can't make the repayments.

[Geniusmcd]

I bought properties for both my girls and they now have them in their own right. Properties can be transferred through the Land Registry. Please do not listen to the mortgage advisor. Sorry but not up to date on current mortgages ...

[Geniusmcd]

I bought properties for both of my girls. Sometime later they were transferred through the Land Registry into their own names. Change your mortgage advisor he is wrong. Sorry up to date with mortgages but think there are some good deals around. Best of luck

[puzzled54]

Genius - how does that work with tax/death duties?

[black_cat51]

"Please do not listen to the mortgage advisor. Sorry but not up to date on current mortgages ..."
don't you think a mortgage advisor might be? Effectively you are saying, hey, i know nothing, but listen to me, rather than a professional that does it for a living!
Anyway otto, what about trying a different advisor? If they are all saying the same, then listen to them. You can have more than one mortgage, but it will depend on your actual income and circumstances. And yes, captial gains tax is payable (when you sell) on a home that is not your main residence

[KARL]

From a tax point of view the most efficient (and best ?) way to approach this is for your children to be the owners right from the outset. Unless there has been a change very recently, you can give them any amount of money tax free provided you remain alive for seven years thereafter and if/when the property is sold it will have been the owner's main/only residence and therefore any gain will not attract a tax liability. The challenge is regarding any loan/mortgage but if you are able to guarantee their payments on any loan then probably you need to concentrate on finding a lender who will lend to them on that basis. While the medical profession seems the worst, in my experience there is no shortage of careless and/or incompetent people in any walk of life - mortgage advisors definitely not being immune. I would not encourage you to assume that, if someone is making a living from something, this qualifies him/her as a reliable source, rather merely a useful indicator as a starting point. Keep looking and hopefully you will find someone who can help you meet your aims. I think it best to have everything in the interested party's name from the outset.

[cassa333]

When I got a buy to let morgage one of the terms was that the renter of the property wasn't a family member.

I don't know if that was just the morgage we got or if it would still apply but it is worth finding out when you get a btl morgage.