Worrying too much in advance?

loopyloulou_3

Hi I dont know if anyone can offer some advice....

I have a £174k mortgage with GMAC - currently fixed until July 2009 on interest only. I had it joint with my ex, we split in Nov and I took on the mortgage in me and my sister's name (as they wouldnt let me have it on my own, even though I can afford the repayments). I have been paying the entire mortgage since Nov last year.

My intention was to keep my sister on it until it is up to be changed, and then decide what to do!

Working on the basis that next year my sister could want to buy her own place, I am not sure what the implications of her being on my mortgage would be (would she be able to get her own mortgage if she remained on mine?) There must be a way round this?!

I really want to try and get away from GMAC as I only went with them as my ex had tons of debt.

So I am worried that my sister will want to buy on her own, and that I wont be able to get a mortgage on my own, and that I am just treading water for a year and will back in this situation. Panic!!

Any advice would be appreciated.

Lou xx

happybroker

Hi Lou,

If you sister tries to get a mortgage in her own name the mortgage she has with you will be taken into account in full when lenders consider how much they will lend to her.

What's your income? That will give us an idea if a lender will consider lending you that amount of money on your own.

loopyloulou_3

my salary is £32760

I dont have any debt (well a minimal amount on a cc which will be gone long before I change my mortgage)

I dont know how much my house is worth given the market, but in Jan it was valued at £190k

happybroker

At nearly 5.5 times your income and quite a high loan to value your options may be pretty limited and it would be a good idea to start trying to plan for this now.

If there is anyway at all you could get the balance of the mortgage down over the coming year it (or build up some cash) it could help you. You wouldn't need to be getting 10s of thousands together but the more you can get the broader your options will be.

You will benefit from seeking the advice of a good whole of market broker who will be able to more accurately predict who will or won't entertain the application from you which could save having lots of searches done and wasting much time.

loopyloulou_3

There is a chance that I will be getting some inheritance - not entirely sure of the amount at the moment.

At least £3k and then whatever my parents decide to give me on top (I am guessing at £10k) Obviously this will be paid off my mortgage when the time comes but I dont want to rely upon it at all.

Im scared about what I have let myself in for now!! I suppose I just have to get my head down and get on with over paying it (or saving some money) and start looking early next year.

UK007BullDog

Well, currently your income is not enough to pay the mortgage.

As already mentioned your sister will have problems if she were to try and get her own mortgage.

How about your parents? Can they be guarantor for you?

You definately need to see a broker nearer the time and you need to have a good heart to heart with your sis and parents. If no luck and sis wants to get out you might have to look at selling and buying something cheaper.

loopyloulou_3

My current lender GMAC wouldnt accept a guarantor, but is it likely others might? My dad is more than willing to be a guarantor, my dad would happily go on the mortgage too, but he has his own mortgage (of about £66k I think)

I feel bad, as I feel I took bad advice (from an IFA) who said taking my ex off and putting my sister on would cause no problems for my sister if she wanted to get a mortgage on her own. I now feel like I have stitched her up int he process.

I am so frustrated because I CAN afford it monthly, and have been paying it happily since Nov, but cant have the mortgage on my own, very frustrating!

happybroker

I can understand your frustration and it's not an uncommon one at the moment. Don't know what the IFA you used had in mind for your sister....might be worth a call to get his view on where things could go.

herbiesjp

You need to keep you eye on your property value as well

Based on £174k mortgage against £190k property value that is 92% LTV

Not many lenders will look at a mortgage over 90% nowadays

So you need to have an accurate idea of your house value, as if prices go any lower, you could end up nearer 95% LTV

So work as hard as you can to get the mortgage balance down as much as possible in order to open up as much options as possible.

There are some lenders that could potentially agree the mortgage for you on your current income, however if again you reduce that mortgage amount it means lower income multiples needed, and more lenders will come into play with potentially better rates

loopyloulou_3

Thanks all
I suppose I just did what I had to do at the time to keep my house, whatever it takes to be honest. I really really really do not want to move and will do anything to avoid it.
Im sure there will be a way round it, I am obv very worried about the house prices going down too, but other than pay off as much as possible (I really am not sure how I will manage to pay off much really) and hope that I get inheritance before next July to knock of my mortgage.

If I am honest, I really cant see my sister buying next year, even though she says she will (but I dont want to tie her in with me for too long either). I might talk to her about staying on my mortgage for another couple of years if she can, just to get me out of a tight spot!

Surely it will be having a positive impact on her credit rating anyways? (provided I keep paying it that is!)

shabbychicfan

If all else fails can you not just stay with your current lender and switch on to whatever fixed or otherwise deal that they have available at the time your current deal comes to an end? That way you would get to keep your house and wouldn't have to worry about selling and moving.