Advice needed for motgage please

hopefulperson

I have inherited half a house with my dad owning the other half of the house. We were selling it but the buyers keep knocking us lower and lower I have had enough and wan to see if it is possible to buy him out.

I am a regular on MSE just had to use a different ID as a few know me on here and don't want to broadcast my circumstances too much hope that is ok and not offensive.

The house was selling for £140k so could i get a mortgage for 70k to by papa out and using my 70 as a 50% deposit.

Catch’s

I have a few debts from a bad marriage that I am currently on a DMP to pay off around about 15k no CCJ's

I am only working part time as have kids to look after etc and my earnings are little over 10k pa I could see to up my hours but then childcare goes up and it is swings and roundabouts.

Currently I am renting, I could afford a mortgage of about £400 is a month making the necessary cut backs etc.

I really do not want to loose this house to guzzunderers i think they call it....

Any advice would be greatly appreciated

arkie

You have no choice here, you wont get a mortgage of £70k for £400 per month , a 70k interest only mortgage @ 8% is £466,, and with being in a DMP your credit rating will be effected and the rates are higher than 8%.
IMO you should do the following
1-sell the house pay off your DMP
2-save the rest of the money until your credit rating improves
3- buy a house when you think houseprices have bottomed out

hopefulperson

Looking at my finances then I could squeaze to this as it is 66 pm higher than the rent i pay at the moment.

My dad says he can gaurentor me no problem.

It just seems such a waste selling a house that last year was worth 170,000 we agreed on 140k and now the are only offering us 120k.

~Beanie~

Do you have to sell it or something? Who lives there at the moment? Can't you live in it and pay your dad rent on his half?

Even if you do sell, you don't have to sell it for £120K, just tell the buyers no! Also, just because it was up for sale for £140K doesn't mean it is worth that, if you were to get a mortgage the lenders will value the house and it may well be less than that. I doubt you will get a mortgage though.

hopefulperson

First of all thank you both for replying

It is an empty house a relatives who left it to me and my dad. I was brought up in the house so have alot of memories there. The house never got put up for ale we agreed with a couple on the street that they would buy it at 140k - this was in July for a quick sale complete end aug - they kept staling then came to us last week and said can't get funds need to drop it to 120k.

My dad wants to money to retire on he is due to retire soon - I have posed the question to him and he is of the mind he wasn't expecting the money and just wants to get rid of the house before winter sets in and before we have to start paying the ctax again, currently just inside the 6 months after probate exemption.

I was not too happy to to sell at 140 but seemed the best option at the time and now they want to drop the price I find it outrageous and don't want to do it now.

I have rung a couple of estate agents who did value it at the time and they reckon the current value for quick sale is 145k.

So I am stuck dad just wants to get rid quickly he with either accept me buying him out or the offer from the horrid guzzunderers!

It is a nice house too - in a good area it needs work cosmetically not structurally it is moveable into, houses have sold in that area in good decor at 180k.

I am willing to up my hours at work to make this workable

Could I self cert?

Spangled

Does your dad really need the £60/70k lump sum (say to pay off *his* mortgage or buy a flash car) or would he instead be content with a regular monthly income?

If he doesn't need the £60/70k lump sum immediately, why don't you move into the house and pay him £400 a month "rent" (that's £400 a month you're paying at the moment anyway) over the next 12/14 years or so (approx £5k a year). Draw up a contract on that if needs be.

Remember that if you take out a £70k mortgage from the bank in order to pay your dad for his half of the house, you'll end up paying back the bank a lot more than that with interest (over a full term) - probably £120k at a rough guess.

Far better to come to a private arrangement with your dad - you effectively get an interest-free loan and he gets a nice additional monthly income for 12/14 years or so.

Even if your dad got a £70k lump sum if you sold the house, he'd only make around £3k a year in interest (after basic rate tax), so he'll be quids in too.

hopefulperson

He does need it unfortunately he wants to move away when he has retired, i have asked and got the big NO, although he is a softy i know he is set on this.

But yes it would be ideal.

andrewmp

hopefulperson wrote: »

He does need it unfortunately he wants to move away when he has retired, i have asked and got the big NO, although he is a softy i know he is set on this.

But yes it would be ideal.

He can move away and the money you pay him can pay for/towards his rent. Maybe he thinks your circs might change and he might not get his money.

hopefulperson

He needs the money to move to buy a house where he is looking to move.

andrewmp

hopefulperson wrote: »

He needs the money to move to buy a house where he is looking to move.

He'll do OK out of it if you give him £70,000 now for it and he waits a while to buy.

Rick62

The other option would be to look to keep the property as a Buy to let investment for now. Take a £60k BTL mortgage to buy out your father, rent the property out, then in the future when your income is stronger you could change to a residential mortgage and move in yourself, if you want.

This way you keep the property, but also keep you costs down (I'm assuming your current rent is less than £400/mth) and should be able to get some extra income from renting the property.