advice please

steakandchips

Hello Just looking for some general advice if possible
I live in Burnley with my partner and children.
I am writing in the hope that someone can either help me with my mortgage application or can give me some advice about who might be the best person to contact given my situation.
At present my partner and I own a home worth £135,000.
We have a new mortgage arranged through London and country for £102,000.
We bank with the Royal Bank of Scotland. Our salaries are paid in and all our bills are on Direct Debit.

In June this year my sister died. She left behind her husband and her son ( 9years old)

The house they lived in was our former family home. It was left to both of us after the death of our Mum.

I signed my interest over to my sister many years ago so that she could use the equity in the home to raise capital herself with her husband on the understanding that half the property was still mine. (This was done in goodwill and obviously without expecting my sister to die at only 38)

Her husband now wants to leave the home with his son and set up a new home elsewhere.

He is happy that half of the home is mine as my sister would have wanted and I would like to raise a mortgage to buy my brother in law’s half of the home.

All the outstanding finance on the home will be paid out of the money he receives and the home will then be totally owned by me.

My intention is to keep the home as an investment or possibly to move back to later in life. As such I would be looking to rent the property out after I purchase it and so I am looking for a mortgage that would allow me to do this.

The Value of this property is between £130.000 and £140,000 according to the estate agents who have looked at it.
The rental income would be in the region of £550 per month according to the letting agent I intend to use. (Their fees are 10% of rent plus 50% of the first month's rent for set up fees, advertising etc.)
This leaves approximately £495 per month for mortgage payments, insurance, maintenance etc.

My problems surround my credit rating.

Previously I had financial problems dating back 6 years when I was ill and unable to work for a while because of a problem with my eye.

Most of these were resolved but on my credit report I have one CCJ still showing and two accounts from that time (including the CCJ) showing missed payments. As a result I have a very poor credit rating and I am struggling to raise the finance I need.

I would like to raise all the capital I need using the equity in the house as security. I would consider using my current home as security to raise a deposit if that was necessary but I would prefer not to if that was possible. (simply so that everything is in one place so to speak)
I rang my current lender to see if this was possible with them but was told that because we had only been with them for three months then my request would not be considered.
We have a previous 2 year mortgage on our current home and all the paperwork to show that our current financial obligations are (and have been) met.

My home is in Burnley.
The property I want to buy is in Burnley. Its Value is £130,000 - £140,000
The finance I would like to raise is £65,000 to buy the property and an additional £5,000 to carry out some renovation /repair / decorating work etc.
My credit rating is poor.
My current job is secure (10 years in the same job)
What would be the best way of raising the finance?

toonfish

should be a straight forward buy to let deal, unless the adverse cedit is really bad. There are many lenders that should consider it and I would advise against borrowing more on your own property.

steakandchips

Thanks.
My own Bank, The Royal Bank of Scotland refused me when I applied with them because of my credit rating. I have got my credit file from equifax and although the rating is bad, (very poor) the things on it are not(in my opinion for what thats worth) that bad, and show consistency over the last 3 years.
I have been told though that my best bet is to try and raise a deposit of 15% of the price I am paying for the half share I need to buy. I haven't got that kind of money in savings or anything so was looking for a way to do the financing, borrowing the whole amount I need, preferrally using the equity in the property as security.
I would appreciate any more advice as I dont want to run another credit check on my file,
These are something that could be affecting my score as there are references to credit checks when I opened a new account at the A & L, Took a loan at the R.B.S. earlier this year, (now paid off) Made the application with the R.B.S. about this current situation

toonfish

you will already own 50% if I am reading it correctly, so only need a 50% mortgage on the property as a whole - there isn't a need for any deposit as long as you tie in the transfer of equity with the mortgage.

The rent should easily cover it.

There are loads of lenders to look at, and it might be worth contacting a broker but as you said, it's best just not to apply here there and everywhere.
Even on "adverse" products the figures should stack up.

steakandchips

My name is not on the deeds as I signed this over to my sister over 15 years ago so technically my brother in law is the sole owner at the moment. As I said it is goodwill from him in memory of my sisters wishes.
He would be prepared to give me the 50% as a deed of gift but this would involve solicitors and his current lender. (my sister had no life cover when she died)
I am trying to avoid this additional expense and time if possible.
As far as a mortgage lender would look at the facts presented, my brother in law owns 100% of the house at the moment.
I am buying it for £65,000 and raising £5,000 for repairs and renovations.
Even though the value is between £130,000 and £140,000 the purchase price appears to be £65,000. Any valuation would show the true value and we are estimating its £130,000 value at the lower end in order to be sure.
More advice would be appreciated

toonfish

Sorry, I thought you already part owned it. Ok, all he needs to do is sell it to you at £125,000 (no stamp duty) with the "deposit" gifted. I am sure this could be arranged quite easily.

You need to involve solicitors anyway, so the extra cost won't be too significant