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Lend a hand mortgage , strange situation

Hello,

Can anyone advise if they think the following is feesable or doable ?

Single male , age 26 . Salary 17,200. 1175 per month income

Debt of 17k on 3 life of the balance cards at 5.9% - cost me £150 per month to service these debts. Happy to leave them long term as the debt on them is money I have used to invest in shares .
Shares are currently worth 28k
Now I am looking at a house what is priced at 50k , my parents have offered to do the tsb lend a hand mortgage and out 20% down in a savings account for me, I have the other 5% deposit needed .
Mortgage would be 250 PCM and I'm single so council tax is 25% discount band A. How much would you out aside for bills per month?
Am o likely to get accepted for a mortgage given the high debt level ? Could my parents act as guarantor to get the mortgage approved ?
As you can see I am happy to keep the debt long term in the hope my shares continue to go up, but will sell them if needed .
Are there any other types of guarantor mortgages I could use with my parents help? Any advice much appreciated . First time buyer
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Comments

  • DVardysShadow
    DVardysShadow Posts: 18,949 Forumite
    Your debt at 1 * income stinks. It may make sense to do this for your share portfolio, but share portfolios can easily, all too easily disappear overnight. If you sell your shares, then you will wipe out your debts and have 2/3 * income as a deposit. For a 50k property, you will need about 2.5 * income as a mortgage, which could be less than 80% Loan to Value, which will get you a better rate. Suddenly, your position looks very good to buy the property on your own without needing guarantors.

    Come back to the shares another day when you have some cash you can afford to lose and keep it ring fenced.
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  • thewinkshow
    thewinkshow Posts: 333 Forumite
    So do you think it's possible I will get accepted ?
  • DVardysShadow
    DVardysShadow Posts: 18,949 Forumite
    So do you think it's possible I will get accepted ?
    Go and talk to a mortgage broker or a lender. Talk about your situation as if you had sold the shares and paid off the loan. I would say you could do it without 'lend a hand'
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  • hcb42
    hcb42 Posts: 5,962 Forumite
    the credit card debt is absolutely frightening for your salary and £150 a month cannot even be touching the sides. I would take the earlier advice.
  • thewinkshow
    thewinkshow Posts: 333 Forumite
    Hc, you are correct , the monthly payment are just covering minimums so not a. Great deal coming off, I have a 2-5 year view with my shares so not really bothered about the debt, happy to service it for 150 quid a month and not really make a dent. Fully aware of risks in shares .
    Anyone think this is possible and to keep my shares ? Could I use the shares as collateral should I be unable to pay the mortgage, which is 250 a month so shouldn't be a problem .
  • DVardysShadow
    DVardysShadow Posts: 18,949 Forumite
    Hc, you are correct , the monthly payment are just covering minimums so not a. Great deal coming off, I have a 2-5 year view with my shares so not really bothered about the debt, happy to service it for 150 quid a month and not really make a dent. Fully aware of risks in shares .
    Anyone think this is possible and to keep my shares ? Could I use the shares as collateral should I be unable to pay the mortgage, which is 250 a month so shouldn't be a problem .
    For a mortgage lender, the shares will not figure in any assessment of your worth, because the value can disappear overnight. So with a debt of 1 * income, you are a man of straw. If you sell your shares then you become a man of substance.

    You cannot have it all. If you want shares on credit, then carry on. If you want a house, then you need to sell the shares to do it in your name alone, which you could easily do. Or you are down to the lend a hand mortgages, for which you are an extremely poor prospect. Not only do you have no deposit, you are in debt to 1* income.

    Once you purchase a property, the money you have in shares would change from money you can afford to lose to money you cannot afford to lose. The shares on credit change from being a bold investment to pig headed folly.
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  • thewinkshow
    thewinkshow Posts: 333 Forumite
    Hi

    So do you think I can get accepted or not ?
    I have Just sent an email to book an appointment with lloyds.
  • If you sell the shares to clear the CCs then, yes (probably). Why not just sell 17k worth of shares then keep back the 11k invested? This is still a large portfolio for someone of your age/salary. They are in ISAs right? Right now your situation seems very risky, I've no idea how your portfolio is structured but am hoping it's spread in various trackers, not two or three companies only?
  • Doozergirl
    Doozergirl Posts: 34,021 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    It seems like a no-brainer to me. Sell the shares, pay back the credit cards, use the change as your deposit and buy your own place on your own two feet.

    If you want to do the same again with the credit card once you've moved in, then you can do. How much debt you take on later, they aren't concerned with. Obviously you understand the risk involved.
    Everything that is supposed to be in heaven is already here on earth.
  • Hi guys thanks for the replies .

    The shares mean more to me than buying a house so I won't sell them if I can help it.
    Affordability wise I think I can manage both.
    Do you think I am likely to get accepted for a mortgage without selling them?
    It's one share, and they are tipped to do well over next 18 months so I am happy to leave in the hope that they come good.
    Of course they can go down. But I've got a decent buffer so far should they fall significantly then I know they ain't gonna come good and I could sell. Been trading since I was 18 With small amounts so fully aware of the risks involved , I also come from a family that have always dealt in shares and investments so know quite a bit.
    I had debts before I started the shares so I've done quite well at 28k as all the 17k is not what I originally put in.

    With the lend a hand could parents be guarantor as well as putting up 20% in savings ?
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