second mortgage - how much will they lend us?

dylly

My boyfriend and I are looking to buy our first home together. He's a first time buyer, but I'm not; I'm liable for 1/2 my sisters mortgage. (about £60k of her £120k mortgage), but don't pay the monthly payments (about £600).

How much would we be able to borrow for our own mortgage?

We have a joint income of £64k, bring home £3500 after tax. Have good credit and no outstanding credit cards or overdrafts. £20k in savings towards a deposit. Prepared to save more.

Properties in our area are around the £200k mark.

We want to start looking at places and get some mortgage advice, but don't want to be laughed at if we'll be unable to borrow enough. I'm worried I'm being too optimistic and think we can borrow more than we can.

Would it be in my best interests to sell the other house (we own less than 10% but think it will be a good long term investment)...
Cheers :beer:

getmore4less

whats the salary split?


BY the way you are liable for ALL the sisters mortgage if she stop paying.

dylly

£36k and £28k.

What originally started as helping a much loved family member getting onto the property ladder is proving to be one of the sillyest things I've ever done! Oh well :cool:

Trollfever

dylly wrote: »

£36k and £28k.

What originally started as helping a much loved family member getting onto the [STRIKE]property ladder [/STRIKE]mortgage debt pit is proving to be one of the sillyest things I've ever done! Oh well :cool:

You are not alone.

GregH

I am going through the process of selling my existing property as my partner and i were unable to get a mortgage to buy another house.

My existing property mortgage is on a permission to let basis, with an 82% LTV and is a variable, 2% above base rate.

My rental income is £600 and my mortgage outgoing currently is £592.

My salary is £38,000, although i have averaged £44,000 over the last three years with overtime, and my partners £11,500, combined £49,500. We have no outsanding debts and a clean credit history.

We have a deposit of £20,000 and were looking to borrow £160,000.

I first went to my IFA who has been really good in the past, the only company that he was able to suggest due to my situation, LTV, Rental income, mortgage payments etc. was HSBC, who we had to deal with direct. We spoke to a HSBC mortgage advisor, who sounded very positive about the situation and sent our documentation to the underwriters. The response came back as a 'No'.

This is an extremely frustrating situation. We both have low outgoings and could easily live on her salary, whilst paying the mortgages with my salary. My existing house was going to be our retirement fund.

I wish you more luck than i have had!

herbiesjp

GregH wrote: »

I am going through the process of selling my existing property as my partner and i were unable to get a mortgage to buy another house.

My existing property mortgage is on a permission to let basis, with an 82% LTV and is a variable, 2% above base rate.

My rental income is £600 and my mortgage outgoing currently is £592.

My salary is £38,000, although i have averaged £44,000 over the last three years with overtime, and my partners £11,500, combined £49,500. We have no outsanding debts and a clean credit history.

We have a deposit of £20,000 and were looking to borrow £160,000.

I first went to my IFA who has been really good in the past, the only company that he was able to suggest due to my situation, LTV, Rental income, mortgage payments etc. was HSBC, who we had to deal with direct. We spoke to a HSBC mortgage advisor, who sounded very positive about the situation and sent our documentation to the underwriters. The response came back as a 'No'.

This is an extremely frustrating situation. We both have low outgoings and could easily live on her salary, whilst paying the mortgages with my salary. My existing house was going to be our retirement fund.

I wish you more luck than i have had!

Not sure about this - based on the figures you might have had other options available apart from HSBC. Did your IFA speak to any other lenders?

Don't forget most IFA's mainly transact investment class business, rather than mortgages on a daily basis - this could mean not being up to speed on lending criteria that may allow yo to do what you want.

I'd get a second opinion from a whole of market adviser, if I were you.

herbiesjp

dylly wrote: »

My boyfriend and I are looking to buy our first home together. He's a first time buyer, but I'm not; I'm liable for 1/2 my sisters mortgage. (about £60k of her £120k mortgage), but don't pay the monthly payments (about £600).

How much would we be able to borrow for our own mortgage?

We have a joint income of £64k, bring home £3500 after tax. Have good credit and no outstanding credit cards or overdrafts. £20k in savings towards a deposit. Prepared to save more.

Properties in our area are around the £200k mark.

We want to start looking at places and get some mortgage advice, but don't want to be laughed at if we'll be unable to borrow enough. I'm worried I'm being too optimistic and think we can borrow more than we can.

Would it be in my best interests to sell the other house (we own less than 10% but think it will be a good long term investment)...
Cheers :beer:

You could do this.

The lenders will need to make a deduction for the mortgage commitment but it could still work.

I say could, as there is plenty more information that would be needed by the lender to agree the scenario.

dylly

Thank you. My sister works for a bank and she doesn't think it will be a problem (either optimistic or a fool!).

Would I be more likely to get another mortgage if my sister and I let our property out, with a consent to let? Rent for the property would be about the same as the mortgage payments.

From what Greg suggests it might not make any difference...

[big sigh]

I don't know whether to give up for a little longer and save a bigger deposit or just go for it.

herbiesjp

dylly wrote: »

Thank you. My sister works for a bank and she doesn't think it will be a problem (either optimistic or a fool!).

Would I be more likely to get another mortgage if my sister and I let our property out, with a consent to let? Rent for the property would be about the same as the mortgage payments.

From what Greg suggests it might not make any difference...

[big sigh]

I don't know whether to give up for a little longer and save a bigger deposit or just go for it.

If you let out the property, and it is self funding i.e. rental income covers mortgage payment - then no deductions will be made from your incomes.

If your sister is still there, then the full annualised mortgage payment will need to be deducted from your salary before applying any income multiples. Then you will need to find lenders that would be happy wit the scenario as a whole.

Each route is different, and has different hoops to jump through.