Getting Mortgage with a Default & poss Capital Gains?

VIGILANT22

oliveoil54 wrote: »

It currently will be approx £130,000, they also have 25% deposit.

Then no stamp duty to pay.....:)

SDLT is charged on the transfer of a debt. ie mortgage

IF the mortgage was 260k on the property and it is transferred subject to that debt then your son gets half the debt (£130,000) on which £1,300 SDLT would be payable.

No SDLT is payable up to £125k

Your son's debt is going to be 65k, (half of 130k) so it is below the threshold.

VIGILANT22

Oh and pls remember their will be a charge for the transfer, the cheapest way of doing it is when they go to remortgage....but either way it's not going to break the bank...It's nice to see parents taking an interest in kids welfare...other than should they go for a fixed or a tracker!!!

oliveoil54

Great thanks once again, for such great advice.

Dont suppose you know roughly what they could expect to pay for a
cohabitation agreement and Transfer of Equity?

VIGILANT22

Cohab...probably 200/300 quid....don't even think about the cost!..read the threads on here where all these couples have moved in together and taken no advice and many are being bankrupted now as they have split up and dont have the income to support mortgage etc....Believe this is worth it's weight in gold....
TOE.....When it comes to remortgaging and if they choose free legals, they may add 100/150quid for the extra work....Outwith remortgaging, possibly double, depending where in the country you are.......

oliveoil54

Thanks for this extra advice.

We are also hoping that he may still have a chance to get a joint mortgage with a smaller mortgage provider, he has spoken to a senior advisor with the Mansfield who told him to send in a letter with his application giving the exact circumstances regarding the default, & provide evidence of his good financial record over the last three years.

Default - He had transferred to a post graduate overdraft account & due to a misunderstanding with info provided by an RBS advisor at the time of transfer, he thought he would not need to pay anything on a regular basis into this account until he returned to the country after nearly a year travelling. Well over 3 months later RBS eventually sent him a letter advising him that a minimum payment per month was required, I immediately set up a standing order for him, then on his return he paid off a negotiated sum which was supposed to be a final payment on the overdraft, at no time was he told by RBS that a Default notice was being applied to his account & credit history. He only discovered the problem when he tried to apply for a mortgage with the Halifax who said no immediately. An Experian check showed he had a good credit history, but another check with Equifax revealed the RBS Default.

In your expert opinion do you think any of the smaller Building Societies will consider him at all given the circumstances?

VIGILANT22

oliveoil54....On here you don't receive advice....only opinion...Also I have no signature, signatures are not checked on here, if people wanted to they could say they're an xyz and nobody would know any different....

VIGILANT22

It's good to know a lender is prepared to take a holistic view of a case...good luck...come back and let us know...........

oliveoil54

I understand your meaning regarding 'expert' and 'advice'.

But from the info you have supplied he now has the poss chance to choose a cheaper mortgage from the one of the bigger banks etc & have reasonable confidence in allowing his partner to have the mortgage in her sole name, if the Mansfield refuses him!

We have complete trust in his partner, but who can say what will happen in the future? So safeguarding his investment via a Cohabitation Agreement will give us a bit more peace of mind.

So I thank you greatly for your opinion. Its worth its weight in Gold!!!:j
Will def let you know the outcome.

getmore4less

When it comes to working out the ownership be carefull, many make mistakes when doing this.


If the goal is to own 50:50 then it is a good idea to do that from the start.

You take the total cost to buy split in two.

Take off any money inputs deposit etc to leave the proportion of the debt each should service, splitting the mortgage costs to keep it 50:50.
Any capital overpayments should be split at the same proportion

Any capital inputs to the house should be shared 50:50.

This makes things easier if there should be a future split when you split the proceeds of sale 50:50 then take of the proportion of outstanding debt each owes..

VIGILANT22

getmore4less wrote: »

When it comes to working out the ownership be carefull, many make mistakes when doing this.

As the OP posted "investing the major share of the deposit"...this was ahy I suggested a cohab agreement, as this is set up to protect what each one contributes, owes etc.........

oliveoil54...Hope to hear a positive outcome...:)