Adding Existing Debt to a New Mortgage?

marty1888

CLAPTON wrote:

several things

the info is a bit confused but if i understand it correctly then
if your mortgage provider is willing to give you a mortgage of £90k (70k +20K) then simply use the 20k to pay off debt. Is this what you are asking?
if the house is only worth 70k then its unlikely that a main stream mortgage provider do this. but there are other credit providers taht will do this ...at a price of course.

yes, basically thats what im asking.
The house is for a 50% share with the other half being owned by a housing association who charge a monthly rent of £100.
What about this mortgage?

http://www.northernrock.co.uk/mortgages/together.asp

CLAPTON

you will need to ask them, i dont know how they will treat the 100 rent or your existing 20,000 loans.
i doubt your salary is enough. you would need to convince them that you will pay off the debts with the mortgage money.
but frankly 20k debts on an income of 23k is very large ..i'ld still suggest you post an SoA

makingendsmeet_2

Hi,

You speak of a 70,000 50% share and no deposit for the mortgage. When we brought our house 4 months ago we needed a 100% mortgage on a shared ownership property. What we found was there are not 1000's of lenders out there that entertain shared ownership mortgages although more are starting to now. But out of all the lenders on the market only 2 yes 2 would offer a 100% shared ownership mortgage product. And that wasn't based on us that was to anyone

marty1888

anyone else got any experience of this?

donteatthat

I'm not sure I could see that many lenders would allow a 100%+ mortgage to service debts at that level compared to income. Or not at any favourable interest rate. Is it worth getting on the property ladder for?
I know some professional mortgages allow 110% borrowing but the ratio would be higher in this case wouldn't it?

lynzpower

My understanding of shared ownership mortgages is that overextending is not allowed.

Youd need to speak to a mortgage broker about this.

In all fairness this is really not a good idea at all, as tomstickland says.

Without sounding horrible, and I dont mean to, no moneysaver in thier right mind is likely to suggest paying 25 years worth of interest paid via mortgage, when you can get unsecured debt at 0% for the short term. If you dont keep up your payments, then of course your home is at risk, whereas if you dont mange to keep up payments on unsecured lending your home is not at risk.

have you worked out what the mortgage will be plus the rent? I guess repayment on the mortgage side of the property would be something like 600 a month and thats on 5% inrterest rates, plus youll have the rent as well.

I offer this advice with the best of intentions. I have a shared ownership mortgage and unsecured debt that due to changing circumstances I can not afford to live here and we have decided to sell up.

Securing debt on your home is about the riskiest thing that you can do. Reead martins article on secured lending.

justmarried06

Hi - we have a 100% mortgage and we tied some debts in with as well - it worked out that the mortgage applies to 90% of the value of the property and the remaining £30k is an unsecured loan on the property at the same rate as the mortgage lending. However, although we were FTB's, we were able to get our mortgage on affordability as we have been renting for 5 1/2 years at the same payment level and therefore had a proven history. I may be in debt again now but I'm not struggling to make the payments, I just want to clear them quicker! I really don't know how it would work on a shared ownership property - and have you looked into all the costs? I know a few people (including key workers) who have investigated the SO option and discounted it as the costs were high once they had added in the rent they would have to pay on top of the mortgage and all the bills associated with owning a property.

HTH,

JM