Negative Equity and new mortgage plus old BR

imcognito

Hi,

Am looking for some advice.. please.

I have made mistakes in the past and due to my ex leaving me with a young baby and a mortgage I got into debt. I was made BR in 2008.

However me and new Hubby have kept our home. But we are in negative equity.

An opportunity has arisen for us to possibly buy a house with my FIL. He would be putting down a lot of money 60-70% of the value and my hubby would be mortgaging the rest.

Are we allowed to sell our home if we are in negative equity? Can the shortfall be added to the new mortgage? This is what we are hoping I was just wondering if it was possible. Whilst I am on the current mortgage as we got this when i worked, as I am now a SAHM I would not be on the new one so hopefully my BR will not be a part of it.

Can anyone advise? I am arranging an appointment with an IFA as i know this is complicated situation but wondered if anyone had any words of advice for me (well my hubbby really) as to this situation.

Thanks in advance

Im

beecher2

No the shortfall can't be added to a new mortgage - you'd have to pay off the mortgage completely at the time of sale.

imcognito

Thanks, I figured as much, I think we could possibly be able to get FIL to use his deposit money to pay off the shortfall at the completion. Would that be ok. ?

beecher2

imcognito wrote: »

Thanks, I figured as much, I think we could possibly be able to get FIL to use his deposit money to pay off the shortfall at the completion. Would that be ok. ?

Yes, but obviously that leads to a higher LTV and higher salary multiple so you need to work out if your husband's salary would support it.

Don't know anything about whether your financial links to your husband will have an impact on things.

imcognito

Yes my impact is a worry, my husband has kept an eye on his credit report ever since I went BR and no impact so far that we have seen.

I think with the value of the house (new) compared to the negative equity amount the LTV should not be too much of an impact. I hope.

Thanks you for the advise I really appreciate it.

Wh05apk

No reason not to add the negative equity to new mortgage, assuming income etc stacks up.

Will your FIL be on the mortgage, or is he just "gifting" the deposit? if not on the mortgage, he should protect his funds possibly by arranging 2nd charge.

imcognito

Oh Thanks!, that may make things easier. Who would be the best person to speak to, an IFA or a mortgage broker?

FIL may possibly be on the mortgage, should DH's credit be affected by mine. FIL will be on the deeds and living at the property should it all go ahead.