Mortgage Assistance 90% (Pref)

mtagt56

Hi,

I currently have a mortgage which was a together mortgage with Norther Rock, my property is now in negative equity and I am now married with a child since the original purchase.

Im pretty stuck on options but the one I have is to rent my current property out and get a new mortgage to cover property I have done some online calculations and have established that I could get mortgage up to £214000, but do not need that.

We have as a family seen a property with persimmon and it is being marketed as an affordable home (government incentive) hence it has been discounted by 30% to £97995. We can lay our hands on 10% deposit in the time needed prior to it being built but would struggle with anything more.

Is there any products out there that would allow us to purchase this property based on 90% ltv?

regards

RenovationMan

How much negative equity do you have on your existing home? Do you have that deal where they gave a mortgage and an unsecured loan at the same time?

mtagt56

Hi yes its a together mortgage I have around 13k negative which I can detach and takeaway run the cost at £85 per month and then have a new mortgage.

mtagt56

Anybody got any advice on this issue

kingstreet

What is the value of the property you already own?

What are the two Together components standing at? Secured £? Unsecured £?

What do you propose to do with this property?

Can you explain the 30% discount? Is this shared equity in the form of a second charge, or is it a price reduction? There are few, if any, 90% deals available on newbuild.

mtagt56

Hi thanks for the reply

The together mortgage stands at £70391 and £15,676 (unsecured)

House value has plummeted I have it on market at present for offers over £69999 but interest is low. I know I can take the loan amount and continue to pay £85 towards the unsecurred.

Ideally I would love to part ex the property and bellway in my area has some fantastic offers on and have heard that they are discounting some houses by as much as £40k not sure how true it was, and wondered if they are doing this would they be likely to meet my part ex at say £70k

The other option is I keep my house and rent it out, if I was to do that I would be looking at completion date of January 2013, for the new house which is valued at £97995, the 30% discount is government iniative called reduced homes/affordable property and that means we wouldnt qualify for any other government offers on that property. We can scrape together a £10k deposit

The things we have going I think is that my wife isnt on my mortgage and doesnt have one.

would she qualify for firsttime buyer then ?

I earn 28636
my wife 22669
and we have 1055.55 chb coming

current mortgage is £483

we have about £1000 each month that we try to save

RenovationMan

I wouldn't look at renting it out, all you're doing is amassing a huge amount of debt with two mortgages and the £15k loan. This is academic though, as I doubt that NR would allow you to permission to rent and if they don't you'd have to get a BTL mortgage but no one would touch you. TBH, with a NE house and £15k of debt I doubt a lender would cover you for a mortgage even if NR let you rent out the house.

Personally I'd stay put and work my way out of debt, tackling the £15k of unsecured debt first and then make overpayments on the mortgage until it was at least back in positive equity. Apart from a few thousand to cover emergencies you should not be bothering with savings, you'll never find a savings rate that is higher than your mortgage and loan rates, so tackle them first.

Zero debt and equity in your house is a better deposit on a new place than negative equity, £15k debt and a few grand in savings. This is your chance to get your financial life back on track - house prices are going no where for a few years so you have time.

leveller2911

As you intend to rent your existing property out, have you checked to see if you qualify for the Scheme.I don't think its aimed at people who already have a mortgaged property and want a 2nd home..

Happy to be corrected ..

Stay in your home, and leave the Government Incentive Scheme "affordable " home for a young couple who need it..

Best to pay down your existing mortgage .......

Yorkie1

You mention £85 per month on the unsecured loan. Have you double checked what the interest rate will be if you were to manage to sell the property? I recall previous threads where the interest rate on the unsecured amount went up post-sale because there was no longer an associated secured loan.

mtagt56

leveller2911 wrote: »

As you intend to rent your existing property out, have you checked to see if you qualify for the Scheme.I don't think its aimed at people who already have a mortgaged property and want a 2nd home..

Happy to be corrected ..

Stay in your home, and leave the Government Incentive Scheme "affordable " home for a young couple who need it..

Best to pay down your existing mortgage .......

Hi, thanks for takig the time to reply it's appreciated the persimmon affordable home scheme does allow for us to buy add this would be our main home.

We are a young couple with baby that needs the space, my reason for asking the question was to see if there is products out there that would require 10% deposit.

We just wanted to ascertain if we there was products for us, affordability wise in our eyes we have good income.

mtagt56

Yorkie1 wrote: »

You mention £85 per month on the unsecured loan. Have you double checked what the interest rate will be if you were to manage to sell the property? I recall previous threads where the interest rate on the unsecured amount went up post-sale because there was no longer an associated secured loan.

Thanks for your reply yes checked that try as additional 1% to interest rate