Would a mortgage provider entertain this?

LinuxAllTheWay

Okay,

I'll try and explain this how it's been explained to me.

• Person A moves in to a rented house.
• The landlord has had issues paying the mortgage prior to the tenant moving in
• It's agreed between landlord and tenant that the rent is paid directly to the mortgage provider (RBS in my friends case)
• The tenent has been paying RBS without fail for well over a year
• There have been a few maintenance issues that the landlord has struggled financially to fix
• The tenent likes the house and the area and would consider buying the property

Now, my mate 'thinks' the outstanding amount of mortgage (and arrears) are more than the house is worth due to negative equity. He's also sure that the landlord may be prepared to sign the house over to him if he takes over the mortgage.

Would RBS be prepared to sign the mortgage over to my mate if the deeds to the house are transfered at the same time?

The landlord walks away debt and maintenance free subject to my mate getting a survey done. RBS gets a good mortgage customer and the mortgage gets paid off over agreed timescales.

Is that possible, is it worth finding out more?

I can ask more questions of my friend if you need more info.

Bibbitybob

If your friend is in a financial position to take on a mortgage, why not just buy a similar house in the same area for current market value? Mortgage company compliance aside, I don't understand why anyone would want to take on a house that is already in negative equity, as well as having 'maintenance issues'?!

LinuxAllTheWay

That was a question I asked. I think it's a case of being settled in where they are (young-ish couple with two small kids). Also, the house prices are starting to go back up so I personally think the NE will only be an issue in the short term.

I've been to their place. It's in good nick. I think the issues they had were boiled related but got sorted in the end. Put it this way, I'd live there.

And yes, it's affordable for them. I should know, I do their books.

Bibbitybob

I could be wrong, but I don't think it's as easy as just signing over the mortgage. I'd assume (although I'm no expert, so someone else may come along and put me right in a minute!) that RBS would class your friend as a new mortgage application and do all the usual checks including a survey for valuation purposes. If the house is in ne then they're not going to want to lend more money than the house is worth.

If the bank would allow them to transfer the mortgage that easily I'd be strongly advising them against it. Even if the house prices rise and take the house out of ne, surely buying a house at market value now would give them a bigger chunk of equity to enable them to move up the ladder? And what if circumstances changed and they wanted to move house but house prices hadn't risen, or had fallen even more?

I can understand them being settled and not wanting to move but I think, if it were me, the pros would far outweigh the cons.

VIGILANT22

LinuxAllTheWay wrote: »

Okay,

Would RBS be prepared to sign the mortgage over to my mate if the deeds to the house are transfered at the same time?

No way would RBS sign over 100%+NE to a new client.
1. The current owner's mortgage just can't be transferred to AN Other
2. This would be a sale and purchase
3. All charges RBS had against the property inc NE would have to be cleared
4. The buyer would have to go through the same process as anyone else when applying for a mortgage ie Credit Check, Income Multiples against borrowing, at least 10% deposit.........

Tell "your mate" to forget it..........

LinuxAllTheWay

VIGILANT22 wrote: »

LinuxAllTheWay wrote: »

Okay,

Would RBS be prepared to sign the mortgage over to my mate if the deeds to the house are transfered at the same time?

No way would RBS sign over 100%+NE to a new client.
1. The current owner's mortgage just can't be transferred to AN Other
2. This would be a sale and purchase
3. All charges RBS had against the property inc NE would have to be cleared
4. The buyer would have to go through the same process as anyone else when applying for a mortgage ie Credit Check, Income Multiples against borrowing, at least 10% deposit.........

Tell "your mate" to forget it..........

Cheers for that. I'm seeing them tomorrow night so I'll pass on your thoughts.