Shared Ownership to Full Ownership - Is this possible?

CherryPerry

I am after some advice please based on the following situation and any advice would be very well received!

I currently have a shared ownership property and a mortgage for £85,000 (balance of £80,000), I have the chance to buy the other half for £90,000 and my partner and I are looking to purchase the other half. He already has a mortgage for £180,000 and I have one for £80,000 on my 50% share. We have a joint income of £63,000 and I have debts totalling £15,000, he has none. What is the likely hood that we can both get a mortgage to buy out the other half (£90,000)? Or a brand new mortgage for the whole amount?

DesertFlyer

We might need a little more information but provisionally what you have described looks difficult (although I might have misinterpreted).

Assuming 50% of your property is worth £90k then you have £10k equity. To purchase the other £90k you would need at least £8k further as a deposit to maintain the current minimum 10% Deposit / 90 % LTV. Park that for a second.

Assuming your partner intends to keep whatever property the £180k mortgage is on this would give you a combined £340k of mortgages which would be 5.4x joint income (not unheard of, but would need something special to secure in this market I think).

So I guess the information required is what equity does your partner have in the other property/what is the value? e.g. If it is £20k euity (10% Deposit/ 90% LTV threshold) then you will probably struggle, but if it were say £110k then you might be able to negotiate something. This would give you total equity of £120k (£110k + your £10k), total borrowings ignoring personal debt of £340k (£180k partner + your current £80k + £80k further) and a more favourable 25% Deposit /75% LTV ratio. Might just be enough to convince your bank.

I'm no expert but that extra info will help form an opinion.