Second mortgage for flat?

[disco1]

Hi guys,
My mother in law currently rents a flat privately, after some thinking over the weekend I thought it could be better for Mrs D1 and I to buy a cheap flat and rent it to her.

Makes long term financial sense as the MOL would effectively be paying the mortgage instead of some private landlord, would have a flat for life and at the end of it all a pension pot for me.

Seeing as we wont be commercially letting it out, just letting the MOL live there is this still technically a BTL mortgage or can I get a standard one? Rates for private ones are less and the LTV %s more favourable.

What are the pitfalls? Am I missing something?

Cant be that simple can it?

[Sarnie]

You can't let BTL mortgaged properties to immediate family.

You can't take out a residential property if it's not your main residence.

There is a type of mortgage for "dependent others" thats kind of an inbetween but lending is strict and choice of lenders/products is scarce....

[Sir Bagalot]

Even if you are lent the money then expect major problems if MIL claims any sort of housing benefit (even well into her 65+ days)

[DonkeyApple]

It's a good idea. You will need a specialist loan. But before investing any further time and effort into the project you should just answer the following question:

Will you have any qualms about evicting your MiL onto the streets or using bailiffs to strip her possessions in a few years time when she is older and more frail and hasn't been paying the rent for a while? You'll probably have to factor in the cost of a divorce also.

At the same time, if you do survive that, if your wife has any siblings they will obviously accuse you of embezzling all their inheritance when your MiL passes.