Advice on securing a Mortgage needed.

allegedly

Hello all, excellent site with generally good advice and guidance and that's what I'm looking for now.
Some background first:
I have a newish small mortgage on an ex council house which I share with my new partner and due to my age, this has a term of 14yrs. Getting this was simply a case of ringing my bank and filling out the paperwork. This property has to be legally completely seperate from the following.

I am 53, earn about £40k and am about to start looking for a mortgage with my daughter, who is 18 and earns about £14.5k, to buy the rented house she currently shares with my ex wife, for which I pay the rent of £700 pm.

The house is a three bed terrace in need of moderisation, it's been on the market for some time, now down to just under £145,000 and there's been no viewings since last September. Now my ex wants to move in with her new partner so I'm looking at buying it.

This has all happened very recently so getting the deposit together is the first hurdle. Any tips on how to sort that will be very welcome. I have considered trying to secure a loan of £10k against the house I live in by adding it to the mortgage.

As yet, I've not spoken to any lenders or brokers and I'm wondering how my request is likely to be met, given the circumstances and todays financial climate. Any guidance on what would be the best type of mortgage for us and where to look would be welcome and any way we could get a longer term other than the time left until I am 65.

Also, if I apply for a mortgage and get refused, will this affect my credit rating? I am a little nervous about starting this process if there is a risk as in the mid nineties I lost two businesses when three supermarkets opend up and closed down most of the independants in our town and I have only recently achieved a firmish footing financially again.

Sorry if this is a bit vague but I guess a big part of the process is knowing the right questions to ask. Any advice will be most welcome.
Thanks
Rob

poppy10_2

How much equity do you have in your current property?

allegedly

Hi Poppy, thanks for the reply, I'm at lunch so just time for a reply!

We were able to buy the house for about 50% market value as my partner has been a tenant here for almost 20yrs and we got it under the right to buy scheme.
Not sure of current market value but prices don't seem to have dropped as much where we live (probably because smaller houses here never got that high to start with) so I'd say between £40k and £60k.

I'm am loathe to involve this property too much in the deal as my new partner is not too happy at putting it at risk, as she see's it. I have reassured her but I can see her point.

allegedly

Had a brief talk with my banks sales dept lunchtime (do they ever update those bloody tunes) and because of my age, the term, pushed to me being still on the go at 70, was 16yrs and £700pm will get me £83k repayment with the need for a pension being set up too.

Odd, really, because when I went online and used their 'see what you can get' automated guide, it came up with £98k over 15yrs at 700pm.

So, I guess the next step is to talk to a broker.

dimbo61

Hi Rob why are you taking out a mortgage to buy a property for your EX wife ,her new boyfriend and your 18yo daughter ?
You have a new partner and at 53 should not be taking on 2 mortgages if you can get 2.
I can well understand your new partner not being happy at you raising a deposit from the equity in her house.
Time to move on and think of your new girlfriend and your retirement
Your EX needs to stand on her own 2 feet.

allegedly

Hi db61. Thanks for the fair comments and practical view. If that was the case, it wouldn't be happening,unfortunatly I didn't explain myself properly.

My ex has delayed moving in with her new partner, into his house to help my daughter, who is 19, typo, sorry and my 18yr old son who has just finished college and is not employed full time, find somewhere to live.
The alternative is they move with their mother, over a hundred miles up country and leave the area on the south coast they've always known and where their friends are.

Were it their choice, fair enough but after going through the loss of the family businesses and home and then the breakup of their parents marriage, I would dearly like to ease their transition to young adulthood as much as I am able. If I can assist them in this and get them a foot on a very difficult ladder, I will. I know from personal experience life doesn't always give us what we'd like but I'll give it a bloody good shot. Any Dad able to would do so, or at least try.

Spoke with my bank again tonight and it doesn't look great there. It's the age thing again. If I offer about £110k I'll get a £93.5k repayment mort with a 15% deposit required. That'll be £743pm at 5.69%.

I don't think he'll go for £110k. However, they'll move one way or another and he'll be faced with trying to let a house in need of work on the DPC, upgrading of the dodgy electrics, a delapidated wooden conservatory, a new kitchen and a new bathroom. Thats all work he was supposed to complete and never did. Or he picks up the remaining small mort on the house and starts to pay, for the first time, the full mort on his new, bigger house. All financed from a small retail shop.

So, options. One. Well, I make him an offer and see what happens. Their mum will have to kick in on the deposit with our daughter and me anyway.
Two. We look for a smaller, cheaper house in the area. They're few and far between and most in need of work. I'm good at the trades but live 600miles away so its a hell of a commute.
Three. Speak to some brokers. See what else is a possible.
Four. I dont have a fourth yet, so I guess that'll be move in with mum.
Sorry if this is all a bit long winded but I guess I'm using this as a sounding board for my thoughts as well as a source of advice.
Thanks for the input. Any more suggestions or guidance will be gratefully received.
Rob

gizmo111

I think I would be inclined to support your children with deposits and first mont rent for a private property. This deal seems to complicated as the house needs a lot of work and is a lot of responsibility to tie teenagers down to.

dimbo61

As you have found out yourself the current market is not good and lenders are being very careful.
As you are already paying out £700 a month in rent for a home for your kids I would look for another house to rent and carry on supporting your kids as best you can.
In a couple of years they will both be working and may wish to move elsewhere in the country to follow a career.
You have tried and are still helping to support them
GOOD LUCK

dimbo61

I lived in a small modern semi rented for nearly 3 years and enjoyed not having to come home from work and start
DIY jobs while living in a building site.
Cheaper to heat, lower council tax, hopefully 2 bathrooms or en-suite, smaller garden, and no building work/repairs

Conrad

Im confused - if you are not living there, then this will be classed as some sort of buy to let with a minimum 25% deposit.

Have I misunderstood, or is it the case you wont move in?

dimbo61

Thats right Conrad he is looking for a mortgage to buy a run down property to allow his kids and EX to live in.