Potential Problem with new mortgage

BoGoF

My partner and I are thinking of buying a new property. We both currently have existing properties with mortgages. My problem is that my mum lives in the property I own as I bought the house under the right to buy scheme (ex council house). The property is in me and my mums name and I wouldn't dream of asking her to move out to sell up.

Therein lies the problem, after using the Nationwides mortage calculator, which seems to be one of the few that asked for other mortgages, they will deduct what I owe on the existing mortgage from what the may lend. Without the existing debt £147,000 but with £107,000 which isn't much use.

Will all lenders do this? Would they consider the equity in my current house - £40,000 mortgage on a property worth £100,000. Would a broker be best?

Any advice greatly appreciated

firstaspect

Well they can't really consider the equity in your current house if you're not selling it. They base what they will lend on affordability so if you will then be having to pay for two mortgages then lenders will need to take that into consideration.
Probably worth going to see a whole of market broker.

GMS

All lenders will take other mortgages as a commitment unless the mortgage is for a rented property and the rental income covers the mortgage in full, and usually with a surplus.

Even if thy do not specifically ask 'Do you have another mortgage?' it should be declared in the 'Do you have any credit commitments?' section.

The equity in your current property is irrelevant for a new application. Any equity in that cannot be used for security on another property as the mortgage company has the charge.

It would not hurt to sit down with a broker but you may find this is very difficult, if not impossible to do.

herbiesjp

This scenario has too many areas that need to be covered in great detail.

You have not put any figures, so that makes it even more difficult to look at the lending/income multiples etc.

IMO the only way forward would be to speak to a whole of market adviser and explain what you are trying to do, and let them explain if it is at all possible or not.

BoGoF

Thanks for the replies folks, pretty much what I expected which is disappointing.

Don't think it'll change things but our joint income is £52,000. We both have credit cards circa £2000, which can be cleared prior to application. Both have a personal loan.

Caz3121

how much of a deposit do you have?

BoGoF

£30,000 - and using Nationwide calculator they would lend £147000 based on deposit and our income without my existing mortgage and £107000 taking it into account. The £147000 was more than I expected tbh.