How do you get two mortgages?

mayb_2

Yes 50/50 is fine and this all sounds promising. I will pass this on and see what can be done with the currentl lender. I think on first approach they were not too helpfull but maybe they will look at this one.

Thanks for your input I am starting to think we can make it happen. It is not our intention to avoid stating the facts to all parties - just to get a deal that suits everyone and is affordable all round.

kchok

Can the son no 1 get mortgage for £125000+£220000=345000?
if thats the case i can't see why he can't have joint mortgage with brov2 in the existing house and joint mortgage with his partner in the new house.i don't see selling the existing house. the stamp duty alone for the same priced house will cost £1750 + all other assciated costs.might as well just pay the £5000 redemption fee and arrange new morgage the way you want.
I know you said the current mortgage is tied in 10 year fix,did you actually ask the lender to put that on joint name .same amount, same lender, same rate,worths a try.
If the son 1 s partner has enough earning they may still get the mortgage on their own right for the new house with the partner.
or if you have 20% deposit £ 11000 for new house you can buy that jointly whatever way with your partner as BUY TO LET start with and then change it as your residential later. i am sure they wouldn't trouble you as long as they get their monthly payments.you can also get that 5.37% for 10 year fixed with woolwich .there may be better deal if you shop around.
5% rate sounds very good .current one i could find is 5.37% fixed for 10yrs with woolwich http://www.woolwich.co.uk/.
You may want to check Tax relief when selling your home at http://www.hmrc.gov.uk/findout/index.htm
if you become Married couples or civil partners you can avoid that too.

Mr_helpful

If the applicants plus any guarantors cn cover the two mortgages with respect to income multiples then no problem. One is not a BTL as one of the mortgagees would live there as residential It could be done I think inanother way but I would have to write war and peace to cover my back from compliance point of view.

mayb_2

Thanks for that kchok - the latest advice the boys have been offered by a IFA is that son 1 sells house to son 2 with us as gaurantors. This requires payment of stamp duty by son 1 but most costs would be included in the mortgage. Son 2 would give some of the money he has borrowed as mortgage to son 1 to use as a deposit on his new house with partner.

Son 1 then has to do a transfer of equity (I think) to get his share registered on the house he has just sold to son 2.

Son 1 can now port his original mortgage to his second house and raise another one with the same company (but at new rate) for the extra money he needs to buy new house with. He then pays this mortgage and part of the mortgage of son 2 (who can't afford all of it on his own). This covers the cost of the money used from the first house as deposit on the second house.

The other option offered is similar to one you describe here where son one keeps mortgage on first house and extends this to get deposit on the second house. Then son 1 pays to live in the house buy has his name put on the deeds or a transfer of equity or whatever the legal stuff is to give him half of the house. Son 2 then buys second house with partner.

Funnily enough the cost of these is about the same and the IFA believes stamp duty has to be paid on both houses anyway. In both cases first mortgage does not have to be redeemed therefore preserving the good rate on that part of the mortgage.
I am checking out those links you gave us as I think it is important to keep straight with everyone whatever happens. Don't want any nasty tax surprises either way. Many thanks.

mayb_2

Thanks Mr helpful - it is truly mindbogglingly complicated isn't it!

Son 1 can raise a fair bit with his partner - probably about £250 000 (more with some lenders multiples) but I must admit it worries me to think of him being so stretched and would like to see the responsibility shared out as much as possible. If he covers all of the debt if anything goes wrong on his side it could bring down the whole pack of cards.

My husband and I had been going to downsize our home and try to help the boys out with some money now - rather than waiting until we pop our clogs.
However, because of endowment and other failures on the mortgage/pension front we still owe £45,000 on our own house. This was recently valued at £250,00. We would have to pay at least £180,000 to buy anything else round these parts. We have a four bed chalet bungalow and it is big enough for them all to come back and live in if all goes wrong and maybe worth staying in for that reason. Also we could release equity on this house to see us through our pension years later on if necessary.

The point is the IFA raised doubts about us being gaurantors on the mortgage as it would have to cover the cost of both houses and our own mortgage. We are both in our fifties and have 10 years + to retirement.

I think we would be allowed to gaurantor the mortgage of son 2 because that combined with our mortgage would be covered by the value of our house. Or would that not be the case?

I did see somewhere that a mortgage provider was offering to have mortgage gaurantors for just the difference between the affordable part of the mortgage and the balance.

I am not sure I understand the exact details of all of these things and at some point we are going to have to trust the advice of an expert and dive in. I do think though that the more I listen to advice on here the more likely we are to make the right choices so thanks to everyone for your time and trouble.