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sallymycat

Hi All

I have a small problem I would like some advice with plz

I am in my 3rd year of my mortgage, I have about £165,000 left to pay,
I pay about £1,070 per month

My home is worth in todays market about £320,000

My brother kindly lent me £45,000 for the deposite when I first bought my house.
And so had a charge placed on my property

that leaves over £100,000 equaty in the property.

I am interested in getting a further advance of £25,000 but my mortgage comonys system wont allow this to go through because it see,s my brothers charge as a repayment and not a part share lets say.

will this further avance be seen as a new lot of money borrowed and in affect place this new money as the third charge,

how can I get around this, there is plenty of my money in the property, I just wish to get to a small amount of it with out having to sell my home.

many thanks

Senior_Paper_Monitor

Firstly - as structured the brother doesn't have a 'part share' - he has a debt/loan secured against the property.

It may well be possible to change the structure so that he effectively owns a portion of the house, reflecting his share of the equity input, under a 'tenant's in common arrangement' (this is all dependent upon who else is on the mortgage, what other mortgage(s), your brother has, credit ratings, backgrounds, incomes, ages etc).

If you took a further loan as you suggest it would either become a first charge as a mortgage from the current lender, or a second charge as a secured loan from another source (who would probably look to promote the status to second charge above your brothers interest - and may scare off a number of potential lenders).

What is the purpose of the further loan (this affects how and from whom it can be raised) ?

I get a little repetitive with this BUT talk to a broker (who will need full details of all involved parties), this is not as straighforward as you might imagine.

sallymycat

Hi and thanks for your reply

as you might have gussed (by my spelling) I am Dyslexic and find reading writing etc (all paperwork) very hard.

so please bear with me,


I went to the same mortage compony for the futher advance as I did my main mortgage.
can the further advance not be part of my main mortgage.
and as such, put them in first place to recive there money back???

Thanks for your help

Senior_Paper_Monitor

Yes it can - which is what I say above (its one option - but, as you indicate has already happened, other issues may impact on the situation).

You are however probably not getting best advice by going direct to lender - add in your dislexia issue and a broker to explain the issues/options may well be a very good investment for you (and your brother).

sallymycat

whats a broker likley to cost me ???? (just to give me a clue)
then how do I go about picking one from an other ???
I live in hertfordshire


many thanks

Senior_Paper_Monitor

Some are free, some will charge a fee (this can be £X + commission they earn - or - a higher fixed fee and rebate any commission).

Most will provide a fairly extensive initial consultation/conversation without charge.

Frankly this is a high value transaction (for you and your brother) and a few hundred pounds - that is where I would expect a reasonable fee + commission to be - explaining the whole process and ensuring you go in the best direction and have the highest possible chance of success would be very good value. As an example, we would charge £250 at application and keep any commissions (there are many other combinations and variations in the market). The rules say that any FSA regulated broker must make the costs clear to you up front and in writing.

Best source of a broker would be personal recommendation - as family or friends. If not use one of the many search engines/directories amd simply make sure that you feel comfortable with the initial discussion. You may chose a locally based broker if you feel mopre comfortable than that, or you can chose someone at a distance if you don't want the meetings - frabkly I feel it makes little difference if they are set up to conduct remote business and you feel comfortable with them. Explain up front the dyslexia issue - it gives them a chance to provide more appropriate guidance/explanation (I appreciate the extra challenge this issue brings - my boss is actually mildly dislexic and much of my work is checking/handling her research and documentation for the occasional word blindness issue).

sallymycat

Any one got any tips or hints on how to do this my self (between me and mortgage comp)

many thanks

kingstreet

Apply to your lender for a further advance?

Some lenders provide a further advance which is an extention of the first charge as the mortgage deed you sign says they will offer further advances.

However, there are other lenders who cottoned on to the idea of secured lending as a way of charging more to make higher profits.

What is your lender offering, if anything?