Mortgage Advice Please

LULULU1

I am looking a helping my son and his girlfrend buy a propewrty. They are looking at properties approx 100k and I would pay the deposit for them of approx 20-25k.

The plan is that his name and mine would go the mortgage.

Can anybody offer any advice about which is the best way to proceed. ie Broker or not, fixed or tracker.

Any other help would be received very very gratefully.

Many thanks in advance

GMS

For a transaction like this you really should see a 'Whole of Market' broker.

Your own staus will need to be assessed, i.e income, commitments, age, current mortgage etc, as well as your son's.

Fixed or Tracker is something that only you can decide, it is based on your attitude to risk. Nobody should influence your decision on this. Assist you yes, make you decide, no.

Thrugelmir

You've asked related questions to this on a previous thread.

Has your situation changed? As you said that you had a mortgage already. Which makes the situation more complex.

LULULU1

Hi to you both.

Firstly I posted it on the broker site as I thought there may be some quality advice there.

My situation is :

I live with my wife and I earn 40k per year and she earns 12k per year. We have a property valued at 180k.

We have a morgage of 119k. I also have 2 personal loans with 17k combined. I also have 12k on various credit cards (low interest)

I also have approx 60k in shares with which I will pay the depoist fees etc..(only want to use aboyur 25k)

My son who I am hoping to get the mortgage with earns 28k per year including guarneteed Overtime.

Would it be better for me or my wife to have our name on the mortgage.

Thanks for your replies.

Thrugelmir

Hi,

Is your concern to protect your deposit?

As your son should be able to fund his own mortgage jointly with his partner.

Having your name on the mortgage would case more difficulties than assistance.

As a side comment. Debt is debt irrespective of interest rate. As repaying the capital is what's at issue from a lenders point of view.

LULULU1

Yes protecting the deposit is one of our concerns.

Not concerned about our son so much but his girlefired and if they should have children etc.

Would it be better to put my wifes name who has less income but no debt apart from the mortgage.

Many thanks for any help.

dimbo61

Have you looked at offset mortgages and YBS family and friends!
Has your son and G/f got a deposit?
If you helped them by making deposit upto 15% and then put rest of money into offset account in your name but offsetting there mortgage.
Like others have said your son and g/f should be buying the property themselves and you could help by offsetting

LULULU1

Thanks Dimbo.

Can you explain this a little more:

"If you helped them by making deposit upto 15% and then put rest of money into offset account in your name but offsetting there mortgage"

kaahu

I like the idea, cool!:j:j

getmore4less

How are you trying to protect this deposit?

Once it is used to buy a house that is it gone till the house is sold.

If it is not realy a gifted deposit but a loan then you should be declaring this.

If you are actualy owning part of the house then you are going to need an agreement that covers all the exit options.

Remember if you are buying part of the house that the value can go down as well as up.

If you do own and don't live there then your asset becomes liable for CGT assesment.


You also seemed to have borrowed a lot of money to enable you to have share investments or are they company scheme shares?

Are your savings/investments in ISA's.


As othere have said if there is a partner that will make it even messier especialy the exit plan since it will have to cover many more senarioes.

Think about

Job losses(4 people)
relationship breakdowns (sons and yours)
more kids
prices drop
place needs money spending(you should pay your share if you own part of it to keep the shares equal)
inheritance planning so deaths (and in any order close together)
tax planning

getmore4less

LULULU1 wrote: »

Thanks Dimbo.

Can you explain this a little more:

"If you helped them by making deposit upto 15% and then put rest of money into offset account in your name but offsetting there mortgage"

YBS have an offset that you can have parties not on the mortgage offsetting so thta protects their money.

http://www.ybs.co.uk/mortgages/types/offset/offset_plus/offsetplus_b.html

Check out the rates and the deposit requirements

http://www.ybs.co.uk/mortgages/current_products/index.html#newM

not the cheapest around but might be worth the extra cost.

So rather than having a deposit of £25k and a joint mortgage of £75k
you gift a £10k and offset £15k on a £90k mortgage

On the 2 year fix the difference in rates is 3.29%(75%LTV) against 5.09%(90%LTV) after 2 years they both revert to 4.99%(variable)

or you could gift £15k offset 10 on a 85%LTV and then use the offset trackers which are 2.59% and 3.59%