Remortgage property to buy another

[BigDataPro]

Thank you so much for all the inputs. I'm very new and clueless to 'Financial Planning', therefore every one of the comment to this post is very very valuable (to me at least).

Reason for this question stems from the fact that 'Given that I have no mortgage to pay (paid it off last month), Do I add value to the house by extending Garage and build a room on top or Do I invest in a property for the kid to stay where her education is going to be for another 4 years?'. She's doing her Dentistry which is 5 years plus couple of more years if she decides to stay there to practice.

Initially thought of buying the property in her name but obviously that may not work out well. Family trust sounds a good idea but there are not many lenders lend to a (family) trust. As I have no clue on investing in (long term) shares, property sounded like a good idea, after all no body can take it and run away.

I'll keep this post updated.

Thanks again for your valuable time and view points. Much appreciated.

[northernladuk]

They won't let you buy it in her name as you will be providing the funds for the deposit. Many mortgage providers won't accept loans and gifts as deposit. Before even considering that how does your daughters loan to value calcs stand up... not very well I imagine so highly unlikely she can buy a house in her name.

Letting to students is a right pain at the best of times so what are you going to do when she has finished? Letting student property is a right pain in the arse. Big money in it but big problems as well.

The number of parents that have thought about this year on year must be enormous. IMO, let her finish uni which will be done in three years and forget buying houses for her. If you want to focus on property then buy elsewhere in an area you know better and to a more stable set of tenants.

[SimonMac]

If your daughter is getting help with her accommodation while at Uni you will need to check that she can use that assistance to pay for a property that is family owned.

[Lance]

Remortgage your home and get a decent interest rate.
Buy the property outright for your daughter and friends to rent. All sounds fine.

You could consider gifting the property to her (or gifting the the £££££ to buy the house herself). Then she can rent it out and have an income mostly tax free (as that's all the income she'll have). If you do that you avoid CGT on any growth in value.
If you die in 7 years she has IHT to worry about.

It's what I think I'll do in a few years anyway.

[ladymuck]

I don't have kids so haven't done it but that won't stop me butting in

The mortgage that will be on your kid's home - is that in her name or yours? Whose name are you expecting to put on the deeds?

If it's her name going on the mortgage, then she will be subject to the affordability checks and it's just bank of M&D providing the deposit. I assume she's going to be paying it rather than you covering two mortgages?

[BigDataPro]

My daughter started Uni last year away from home. Currently staying in a rented accommodation with few friends. I am looking at ways of buying a property by remortgaging my home so that she can stay there.

I will be in touch with an Mortgage advisor, but thought of asking if any one has done it. Are there any pitfalls? Can the property be bought in your kids name?