Transferring/adding child to mortgage

JoshH_2

Hi guys/gals,

Here goes for a 1st post!

This site is a new thing to me as ive always been more technical and hands on rather than theoretical, so the numbers game is a bit of a blur. I do however love my mother and would like to help her when i can, shes stubborn so wont even consider asking (even the bank) what i am about to ask.

Basically shes 51, earning something like 17k a year, about 6 years ago she split with my father and she kept the house, with all the children. The agreement was that until my youngest sister turned 21 she wouldnt have to pay my father his half/percentage he had in the house.

The time is looming and she has to find this money to pay my father by august of this year. He is owed about 45k i believe? He is pressing for the money because he would now like to get out of renting and sort something more permanent out.

She has asked me if i would go on the mortgage with her, or another one of my brothers, to extent the term for me/my brother borrowing (if that makes any sense) Again, her asking ws passing comment but i can see it worrys her. I am a student with obvious debts to account for but i have been the most active borrower out of my siblings. My brothers work full time and earn 16k and 25k, who would be the best option if anything is possible?

Is there any way this can be done? She essentially needs another 90k to cover paying my father and the rest of the value on the house, i think? and then have that 90k in one of our names or jointly, howeve,r she will be paying as we all have other overheads to cover.

The house is valued at just over 200k i think but im not sure of the number specifics as she keeps all of that information to herself, would i need to know this before any advise can be given? If she can borrow this extra 90k will a deposit be required or just use some of the value of the house?

Essay over.

Somebody help!?

ViolaLass

Two thoughts:

1. Why does she need £90k if your father is to receive £45k?
2. If you don't have an income, I can't see how adding you to the mortgage would make any difference.

beecher2

How would she pay a 90k mortgage when her income is 17k? I can't see how she could afford it without help from her sons. You need to have a family discussion about this as it would be a huge commitment for any of your siblings who earn money. It would make it very difficult for them to buy their own place in the future, particularly as your mum would be likely to have problems paying the mortgage.

Downsizing may well be the best option, especially if it would leave your mum mortgage free.

kyleemlewis

Your mum needs to speak to her mortgage lender asap. I work in the mortgage team for our Building Society and we have requests like this quite often. You can add someone to a mortgage, it's called a transfer of equity and is relatively easy. Like the others have said though, income seems to be an issue.

Most lenders have different multiples, for example one way we work multiples out is to times the incomes by 2.75 so you would do £17k plus say £25k and multiply by 2.75 which gives £115,500 which is the most we would lend to a customer with that income. Thats obviously just the very basic way of doing it. Credit commitments are taken off that figure.

If £90k is needed then your mum and the sibling earning £25k could probably cover that. The bank would do a transfer of equity to add your brothers name and do a further advance for the money so your mum could give your dad the money.

As i said before, the best thing to do is to contact the mortgage lender asap as they will have their own policy and procedures but they will always try to help.

JoshH_2

As said in the above post, im just going with what little i know or can pick up in the VERY breif conversations ive had with her. As far as im aware she has whatever is left on the mortgage, but ows my dad 45k, so im just assuming a re-mortgage would require the money left on the house plus the £45k?

And as your answers have proven nothing is as simple as that nowadays! the only way i was thinking about myself being added (albeit without income) would be that she could borrow over the term i could borrow not her borrowing term/retirement. But again, i made the simple mistake of forgetting my income (like 3k from work and 6k from student loads which isnt even "income")

But as kyleemlewis very helpfully pointed out my brother earning the higher ammount was who i initially suggested to her also. He lives in hemel hempstead and not at home like myself, dont know if this would cause a problem?

I have told ehr to go to her mortgage lender, but as said, shes prouder than she lets on and doesnt like "help".

Keep the answers coming guys, and ill try and get numbers to see if there is something more specific someone can suggest. "Transfer of equity" seems to be a starting point from my end though, thank you.

beecher2

You need to involve your siblings in this before approaching the mortgage lender. Your brother may not want to be on the mortgage - it is a huge ask to expect him to go onto the mortgage and I've lost count of the number of threads from people regretting doing something similar as they're stuck and unable to get their own mortgage.

JoshH_2

Not to worry, my older brother is aware, as he was involved with the initial conversation, but obviously he will need to know the risks of borrowing with my mother in regards to future borrowing. Luckily he is down for easter so a sit down conversation will be in order!

Downsizing could be an option but the problem with having most of our family and jobs, commitments etc, in bournemouth, its a rather expensive place to buy, so she will be losing a lot of space etc by doing this. Worst case scenario, i know money will have to come first.

kyleemlewis

beecher2 wrote: »

You need to involve your siblings in this before approaching the mortgage lender. Your brother may not want to be on the mortgage - it is a huge ask to expect him to go onto the mortgage and I've lost count of the number of threads from people regretting doing something similar as they're stuck and unable to get their own mortgage.

Absolutely, although always worth speaking to the lender to check their policies on ToE before getting into long winded chats with family.

Suppose it doesn't make much difference which way round it's done.

Good luck with it.:)