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Sister and Brother in Law Getting Mortgage for Us

  • 09-09-2016 12:35pm
    #1
    Dats_rite
    Registered Users, Registered Users 2 Posts: 290 ✭✭


    Hi All,

    Myself and my wife are struggling to get a mortgage. We are buying a house for 270,000. We have 150,000 in savings and are requesting a mortgage of 120,000. The monthly repayments are approx. 600 and we are paying 650/month in rent and are still saving so we have no issues meeting the repayments.

    I work and my wife is currently job seeking. The problem is we have a mortgage in Belfast and the bank are stressing that mortgage and not accepting the rent as an income. My salary is also in the North so they are stressing that too.

    We have gone through a lot of options and my wife's sister and brother in law who have no mortgage on their house and both work said they would come in with us on the mortgage or even get the mortgage in their names for us....a very generous offer.

    If we do go in as 4 on the mortgage the mortgage will be treated as a buy to let and therefore increasing the rate from 3.1% to 4.4% approx. Quite the hike.

    My question is, if our sister and brother in law buy the house in their name can they sign the house over to us in 3/4 years when we are able to get a mortgage on our own right?

    Or can they sell it to us for a nominal fee of say 1 and therefore pay no stamp duty as we will have paid it before.

    Is there tax issues with this?

    Any help or ideas would be much appreciated.


Comments

  • #2
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,858 Mod ✭✭✭✭Henry Ford III


    Sorry but I just can't see that happening. Too messy for any lender.


  • #3
    Dats_rite
    Registered Users, Registered Users 2 Posts: 290 ✭✭Dats_rite


    I have been discussing with AIB for past month. They will do it. But as mentioned they will probably put us on a buy to let rate.


  • #4
    Trish56
    Registered Users, Registered Users 2 Posts: 1,256 ✭✭✭Trish56


    Your going into dangerous territory here so please discuss with your Solicitor before you make any decisions as should your wife's sister and husband as there are huge implications for both couples with your proposal.

    Have you discussed if the lender will accept your sister in law as a guarantor.
    AIB do take in 50% of rental income.

    What's the possibility of your wife returning to work which should improve your chances of getting a mortgage or have you considered selling the property in Belfast.


  • #5
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,858 Mod ✭✭✭✭Henry Ford III


    If AIB will do it that's fair enough but the potential complications are huge.

    You've legal vs. beneficial ownership issues, guarantees, potential disputes and changes in incomes and locations.

    You've also stamp duty issues down the tracks should you wish to remortgage into your own names and/or remove their names from the deeds.

    Make sure you get proper advice on this. A good solicitor is needed.


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