Fantastic opportunity - but I have a DMP - don't know how I can work this.

giddykipper

Hiya

I've posted about a similar thing before but since then, things have moved on. I'll try and keep it short and to the point.

My parents are going to inherit a property in a couple of years and therefore are going to sell their house.

They have offered my bro and me 25k each from the sale of their property.

I have a DMP of about 60k at the moment, 6 defaults that are 3 yrs old!

My parents have said that I can buy their house from them at a rock bottom price (they're offering it to me at 150k, its worth about 200k). This is a once in a lifetime opportunity and their house is just gorgeous .... an offer like this isn't going to come around again!

My current mortgage is 65k, in my name only and my property is worth about 120k. Mum and Dad need to sell their property before they can give me and bro 25k.

If I could get a mortgage on Mum and Dad's house, then it would be in joint names (me and hubby - who is self employed but has an 'ok' credit history).

So, can you see any way round all that?

I can't pay off the dmp unless I either have the 25k (and offer full and final settlement in 3-4 yrs) orrr sell my house to pay it off. I can't get a mortgage with defaults or a DMP!!! M&D need to sell their property before they can give me 25k.

Its all a bit of a mess but I'm really hoping there's a way round it all so that I can be debt free AND have a lovely house to be proud of that's worth a lot more than I have to pay!!

Any advice that anyone could offer would be really really appreciated. I'd hate to miss out on such a fabulous opportunity!

Thanks, Jo x

Tixy

Do your parents want to sell their house now? or in a couple of years when they inherit a new one?

Will they give you £25k on top of a £50k discount on the house price?

If they want you to buy it in a couple of years could you sell your house now and use the equity to pay off the DMP. Then rent somewhere in the meantime and save up what you were paying in debt repayments to go towards a deposit in 2years.

By then your defaults will all show as settled and will be over 5years old meaning you may well be able to get a mortgage even if its not the absolute best rates on the market (assuming both you and OH are still earning at a sufficent level for a mortgage of that size). Then a couple of years after that once the defaults are clear you could remortgage again pay the £25k off the mortgage and get a competative mortgage deal.

giddykipper

Hiya, thanks for your reply, really appreciate it.

They'll want to sell in a couple of years when they inherit.

They've said they'll sell us the property for 150k (basically they're looking to get 100k out of the property and me and bro get the rest to split between us) and then either give us the 25k or knock that off the price further.

I should have mentioned that our current house is only half way through being done up - it was a DIY project and with being in a DMP, progress is slow so it will probably take the 2-3 yrs to finish this place in order to sell.

giddykipper

Just been talking to OH about your fab idea and actually, think this would work.

My parents have said that even after they inherit the new property, they'll want to do it up before they move in ...... soooo if we do ours up over the next couple of years, we can then put it on the market .... once it sells we can pay off the DMP (full and final settlement, so maybe less than we currently owe, plus we'll have paid more off the DMP in that time anyway) .... we could then either move into rented or even move in with M&D for a few months until they get their new place done up.

Then we can apply for a new mortgage with the Defaults having been settled .... and we'll have some money left over from the house sale to put down as a deposit!!

The only question would be if we could get a mortgage so soon after the default was settled. Like you suggest, we could remortgage a couple of years down the line to get a better rate etc. but wonder if we'd get the mortgage in the first place with the default only just settled a few months before?!?!?

Thanks again sooo much for your reply, its really given me hope that maybe, just maybe, if we box clever - and with fantastic help from my parents, we could end up debt free (except mortgage of course) and with a fabulous house!!

xx

MrsTinks

Well you might and might not... the problem is that the lending market may have become more relaxed or on the other hand it might have tightened up! Your guess is as good as ours...
Even now I'd say it depends on how big your deposit is...