what are my options? If any...

jacel300

tried for a transfer of equity 1st causing us to remortgage in the two names but our lender said no because of the bad credit.
could you pm me on how that credit agreement works please

kingstreet

It isn't a special offer or different loan. All your mate has to do is approach a lender who will accept the existing mortgage remaining in place and will take the payments off his income before calculating his borrowing power.

As long as the overall income is enough it should work.

Here's the case I did as an example;-

3 lads own house with Northern Rock mortgage of £120,000. Monthly payment is £500. One borrower wants to buy with new partner but others can't buy him out and property won't sell.

He and partner earn £21.5k & £14.3k respectively. They wish to purchase for £142k with a mortgage of £112k.

New lender would normally lend upto £143k. They took current mortgage payment of £500, multiplied it by 12 to get the annual equivalent, then took it off income.

So a joint income of £35.8k becomes a joint income of £29.8k when the £6k is deducted. The lender would then lend a reduced amount, upto £119.2k. They wanted to borrow £112k, so the case was able to proceed. This is because the lender deemed the applicant could afford both mortgages if the other borrowers couldn't continue to pay Northern Rock.

A good independent or whole market broker should be able to place this without too much trouble, as long as there's enough income to cover both mortgages.

Obviously this is only a short-term solution to help your friend get his new home. Unfortunately if your current lender won't authorise a TofE there isn't an awful lot you can do about that now.