Help!! Seeking Expert Mortgage Advice

tyor

Hi,


We are looking at taking up a mortgage for a new property and hope to raise the deposit from a property in my wife's name. We have valued this property and are confident we can raise the deposit by remortgaging.

However, there are a few issues here.

The property is in my wife's name only (as is the mortgage). Because her credit rating is quite poor (a couple of CCJs on default payments on previous loans) it'll be difficult for her to find a lender for a remortgage let alone a mortgage for a second property even though she's never defaulted on her existing mortgage.

As for me, my credit report is ok and I'm fairly confident I can get a mortgage with a 15-20% deposit.

The issue is, how we can remortgage the existing property to raise the deposit for a new property? Bearing in mind the CCJ on my wife's credit report which means any joint application could have a negative effect on my own credit rating.

We are open to all options except any that would affect my own credit rating and the easiest option of all which is to sell the property.

Thanks

GMS

When did the CCJ's occur and for how much?

How much is the current property worth? How much do you want to raise? I assume the current property will be let out?

What is the purchase price of the new property?

tyor

The CCJs occured about a year ago.

The mortgage on the current property is 150K. It has been valued at 300K. We are looking at raising between 45-60K through a remortgage.

We are looking at properties in the 300K range.

tyor

Forgot to add that yes, the current property will be let out. It's in a well sort after area hence the reluctance to sell. The rent can easily pay off the monthly mortgage cost.

GMS

With CCJ's in the last year then I cannot see the plan working. A Buy to Let with adverse under 2 years old will be very unlikely.

What incomes do you have? Could you not sell the current property?

tyor

I contract on a daily rate between 300-400. Wife's is in a permanent role earning 60k...

Not looking at selling as it'll cost more to get the same type of property a few years down the line.

I guess the worse case would be to wait a couple of years for the wife's credit rating to improve.

A mortgage broker suggested the following. Is this an option?

Trying a ‘Transfer of Equity ‘ with the lending bank whereby I become joint owner of the property and joint mortgage holder also.

After this I can then do a remortgage in my name, again via the rentals, on a buy to let basis.

holly_hobby

A couple of yrs wait with a CCJ will make no difference to a lender - especially when the lender considers the level of household income you have quoted.

Has your wife considered settling her CCJ - as this is an action that would help improve her credit record.

Holly

GMS

tyor wrote: »

I contract on a daily rate between 300-400. Wife's is in a permanent role earning 60k...

Not looking at selling as it'll cost more to get the same type of property a few years down the line.

I guess the worse case would be to wait a couple of years for the wife's credit rating to improve.

A mortgage broker suggested the following. Is this an option?

Trying a ‘Transfer of Equity ‘ with the lending bank whereby I become joint owner of the property and joint mortgage holder also.

After this I can then do a remortgage in my name, again via the rentals, on a buy to let basis.

A transfer of equity will cost legal fees and require the permission of the lender to add you to the mortgage. If you are then intending to remortgage on your own, which would require a 'transfer out of equity' for your wife's share why not purchase from her in the first place? Buying from your wife could also be difficult if the lender were to class it as a 'bail out' situation

Seems a very long winded way to achieve a sole name ownership.

You would still have issues with a residential mortgage given your wife's credit history. Your income status could also cause issues both for the Buy to Let and the new residential.

You should speak to a Whole of Market broker to see if there is a way forward.

Thrugelmir

tyor wrote: »

I contract on a daily rate between 300-400. Wife's is in a permanent role earning 60k...

Not looking at selling as it'll cost more to get the same type of property a few years down the line.

As an observation. As your both high rate tax payers letting property isn't a very tax efficient investment. With CCJ's its obvious to any lender that the management of your personal affairs is poor. So perhaps sell your wifes property and utilise the equity to have a comfortable lifestyle.