Helping Parents-inlaw get a mortgage

mdeaton

Good morning, My Fianc!'s parents have a mortgage secured on their house that they have just sold -not completed yet. Her mum is struggling to keep up the payments on bills/mortgage etc as her dad no longer works (due to illness).

She has had an offer accepted on a house that she wants but is now struggling to get a mortgage. She apparently only has one default that was recently registered against her (the last 4 weeks or so) for £300 which has now been paid and is awaiting update at the credit reference agencies.. she has asked us to go on a mortgage application with her so that she can get a mortgage and then take us off it in about 12 months time.

My worry is, will me and my partner lose our "First Time Buyers" status when we come to buy a house in a few years time?

We currently rent and have 1 credit card and 1 loan but otherwise we're debt free.

What happens if my mother in law gets into the same situation before we come off the mortgage?

Thanks!

Michael

TrickyDicky101

You are right to be wary. You don't mention ages or amounts, but this comment:

"go on a mortgage application with her so that she can get a mortgage and then take us off it in about 12 months time. "

It wouldn't be her choice (or yours) to have you 'removed' from the mortgage - the bank would have to agree (or you would need to fully redeem the mortgage). The bank would be HIGHLY unlikely to agree unless circumstances radically change (Mil would need to qualify for the mortgage by herself under the lending criteria in force at the time).

AFAIK you would not be a first time buyer if you did this - you would need to be listed on the property at the Land Registry to get the mortgage and then would not be a FTB.

I wouldn't touch this with a 40 foot pole.

hillcats

Also, if they were to default as struggling you would also be liable for the debt - steer well clear, not your problem. You would be liable for the whole debt both jointly and as individuals.

beecher2

That's quite a big ask! I'd be encouraging them to go into rented accommodation. Then in a year's time, when she still can't get a mortgage you will sigh with relief because you didn't get involved.

mdeaton

Ok, Thanks Guys.. That's made my decision much easier. - Michael

CLAPTON

the lender will insist that the people on the mortgage are also the people who own the property (i.e. will be on the deeds)
so all three will be owners and all three jontly responsible for paying the mortgage

the fact of the mortgage will produce a financial link between you all which may mean that your own credit rating may be damaged by the association

to take you off the deeds will require the lender to agree to the removal and so MIL will have to be able to get a mortgage in her own right

depending upon the amount of money involved, removing you from the deeds means that you are selling your share to MIL which may mean stamp duty may be payable

obviously you will no longer count as a first time buyer

if she can't remortgage in a year, it means you are stuck with responsibility for a mortgage which may make it very difficult for you to get a mortgage of your own in future

she needs to consult a mortgage advisor who may be able to help