roadrunner
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| posted on 27/6/17 at 08:04 PM |
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Anyone a money expert.!
I'm looking into buying my mother in-law's house at a vastly reduced price. There is a mortgage and equity release loan to pay off so we
can put the house into our name.
My mother in law will then pay us rent to help offset the extra mortgage costs.
What I would like to know is, what are the basic costs of purchasing a home. I don't need any surveys doing or the like. Just a solicitor to
finalize the deal.
Any help would be great.
Regards
Brad.
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matt5964
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| posted on 27/6/17 at 08:18 PM |
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If you are purchasing with a mortgage you may still have to have a base level survey to satisfy the lender
A solicitors for a sale only should be around £400 depending on the sale value.
You may also need to get searches done to satisfy the lender.
You could use the online convayency forms that would be around £250 but in most cases they are more hassle that the saving is worth.
Luego velocity XT 2.0ltr 221.3bhp 178.9lbft
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stevebubs
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| posted on 27/6/17 at 08:58 PM |
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Conveyancing & Stamp Duty are the 2 costs to be borne in your case... plus (if you're taking a mortgage out) any costs associated with that
- likely to include a survey
[Edited on 27/6/17 by stevebubs]
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Barksavon
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| posted on 27/6/17 at 09:10 PM |
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Stamp duty on a buy to let mortgage is 3% of purchase price, apparently buying a 2nd house and then renting it to a family member is a big no no, you
will have to pay tax on your rental income, the rate depends on how much your total income (salary etc) is. Couple of weeks ago I was told by a
mortgage advisor that the approximate cost of buying a house (for £80-90,000)nowadays is around £4500..... I would say do your homework and speak to a
mortgage advisor.
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roadrunner
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| posted on 27/6/17 at 09:21 PM |
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Thanks for the info fellas.
I will look into it a bit more.
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obfripper
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| posted on 27/6/17 at 09:57 PM |
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One thing to consider is any discount from the market value could be liable for inheritance tax as a gift under the 7 year rule.
Any discount would however help in stamp duty terms, as that is calculated on purchase price not market value where a gift element exists, but may be
affected also by the outstanding balances of the current mortgage and equity release loan.
The house needs to be her current primary residence (and used as such since first ownership), or it will also attract capital gains tax at her end
upon sale, and this is calculated using market value and not the purchase price.
A good solicitor and accountant will help to make things as favourable as possible, but will cost as always.
Dave
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Chris_Xtreme
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| posted on 28/6/17 at 12:45 AM |
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There is also another thing that could come and sting you if it was not bought at market rate
http://www.payingforcare.org/deprivation-of-assets
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Nathsx
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| posted on 28/6/17 at 05:42 AM |
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We were about £1200 on solicitors fees,
£395 for the product fee which is something you cannot avoid when taking out a mortgage
and the price of the home valuation which again is required by the lender, you may not need a full building survey
This was in scotland not england so laws could be different
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Bluemoon
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| posted on 28/6/17 at 06:23 AM |
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You will end up paying a higher rate of stamp if you move...
Dan
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roadrunner
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| posted on 28/6/17 at 11:25 AM |
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Would it be simpler to give my mother in law the money to pay off the debts and then just pay a solicitor to transfer the deeds over.
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bozla
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| posted on 28/6/17 at 11:56 AM |
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Yes. If you don't you will need to get a buy to let mortgage and the amount that you can borrow will be related to the rental income. You will
also need to show that the rent will cover mortgage interest at a rate of 5.5% plus 40%.
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