Have debt but parents putting down large deposit. Chance of getting mortgage?

Fjords

Hello,

This is my first post on this forum, although I have been reading it for several years.

This is our situation.

My wife and I are looking to get buy our first house, but as most FTB's we don't have the deposit. On top of that my wife is on a DMP (her debt is now finally under control). Myself, I am in a much better position. I have £20k in debts with £11k in credit cards and £9k in loans. I currently earn £2200 per month and my monthly credit commitments are £1100. We are renting at the moment and although we have a lot of debt we are comfortable.

All my loans will be paid off by June next year and I will then work on my Credit cards.

We have been offered a very genrous proposition from my father in law. He would lay down 1/2 of the house price in cash/deposit and we would apply for a mortgage on the remaining amount. We're looking at around £200k to spend so he wuold put down £100k. He would then own 50% of the house of course. We would be looking at buying a house which needs a lot doing to it (he's a carpenter, my brother in law a plumber/electrician and we are excellent painters!!).

My wife has a dodgy credit record so the mortgage application would be in my name as I have a clean credit record with no missed/late payments.

What are the chances of me getting a mortgage with my current debt. After all, we are putting down 50% deposit.

Can the mortgage be in my name, but the house in me, my wife's and my father in law?

I know some of you will suggest he pays off my debt, but that is not an option. Although I'm family, he wouldn't be happy paying off my debt, nor would I.

Anyone know if we stand a good chance of getting a mortgage?

_Andy_

Your credit commitments are 50% of your net income and you want to take on MORE debt?

Robert_Sterling_3

Fjords wrote: »

Can the mortgage be in my name, but the house in me, my wife's and my father in law?

I will answer the easy bit.

If all three of you had your names on the house i think that the lender would want you all to be jointly and severally liable to pay the mortgage and all three would be credit checked.

For that reason I think the answer will be no.

Someone else may think differently.

Fjords

_Andy_ wrote: »

Your credit commitments are 50% of your net income and you want to take on MORE debt?

Let me put it differently.

We currently pay £900 per month in rent. My father in law is willing to put down 50% of the morgage as a deposit in exhcange for owning 50% of the house (which is fair).

Our mortgage would then be around £500, depending on what deal we get, per month on a repayment mortgage. £400 less than we pay now and we are paying down on our own house and not into someone else's pocket.

Most of my debts will be gone by next year. I pay at least £1000 per month into my debts. If we get this deal I can pay down my unsecured debts even quicker....

I think that makes perfect sense....?

Fjords

Robert_Sterling wrote: »

I will answer the easy bit.

If all three of you had your names on the house i think that the lender would you all to be jointly and severally liable to pay the mortgage and all three would be credit checked.
For that reason I think the answer will be no.
Someone else may think diffeently.

Okey... My wife is the one who should not be credit checked (bad debt) so perhaps only me and my father in law would work? But then we could perhaps add my wife's name to the deeds later?

SolicitorMidlands

You could have a trustee agreement with your wife without her needing to be credit checked or on the deeds.

Fjords

SolicitorMidlands wrote: »

You could have a trustee agreement with your wife without her needing to be credit checked or on the deeds.

Many thanks for all your replies.

Trustee agreement could be an option.

But what are my chances of getting a mortgage of £100,000 with 50% deposit? (Total value of house £200,000). If I had no debts I would probably have lenders falling over themselves to offer me a mortgage. But I have £20k and pay £1000 per month. Btw, my father in law is retired now. (But he owns 4 houses outright which are full of tenants and his own house has a minimal mortgage on it. He has plenty of cash). Would I still be considered high risk and find it difficult?

rinkydinkpanther

I doubt you will be able to borrow 4 x income whilst having your level of debt.

Robert_Sterling_3

You and your father in law could both be on the mortgage and the deeds. Your father in law would then be jointly and severally liable for the mortgage.

Fjords

rinkydinkpanther wrote: »

I doubt you will be able to borrow 4 x income whilst having your level of debt.

My income is £36k plus a 10% bonus which I have never failed to get (even got is this year as my job is more or less recession proof). £2200 per month after tax. That's just under 3x my income for the £100k i need to borrow.

ooglewoogle

I am dubious of your chances of getting this right now, especially in light of your commitment to servicing your existing debt.

Why not wait till next year? You will have cleared almost all of your debt and almost certainly, in the current financial climate, be able to afford a much better house for your money.

Just my tuppenceworth!