FTB case or Investor

[Apollo]

Hi guys,

A friend of mine is buying, along with his brother who already owns a house, his mother & brother out of the family home.

There is about 200k left on the mortgage.

Will my friend, the FTB, be treated as a FTB for stamp duty & TRS or not do you think? He plans to live there but the other brother on the mortgage will stay in his current home.

Also in a case like, I guess a regular joint case, will the bank each month collect payment from 2 current alc's or is it normal to set up a separate current a/c to make monthly repayments?

If there is a missed payment will the credit rating of both be potentially affected instead of just the one who was at fault?

rgds

 

[Dreamerb]

It's a somewhat complicated one for a number of reasons. If he's buying with a brother who is not an FTB, then for stamp duty purposes he will not qualify as an FTB. However, he may benefit from reduced stamp duty on the basis that it's an in-family transaction - on which stamp duty is halved, I think. It's vital that he get professional legal / financial advice on the value of the stamp duty liability. The fact that his brother already owns a home may be a complicating factor, but I simply don't know enough about it to comment further. As I never tire of pointing out, however, Revenue tends to be very helpful, so he should call them and outline the position. They may be able to give a categoric answer straight off.

Your friend will probably, assuming this is to be his PPR, qualify for FTB tax relief. Again, legal and financial advice should be sought.

Whatever credit institution holds the mortgage will want to take the payment from one account. It's not necessary to set up a separate account - the debit can come from one of their personal accounts if they so choose, and they can make arrangements for the other to transfer funds as appropriate, for example by means of standing order. They may of course prefer to set up a separate joint account for transparency reasons.

I don't know about the ICB issue, but strongly suspect that if there were to be a problem, both ratings would be affected. If it's likely to be an issue, then it would be very unwise to enter into the kind of financial commitments involved.