Playing the mortgage system?

topherknowles

We're in an odd situation with our mortgage, it's not portable and we have the deposit saved up for the next place... so in many ways we are like first time buyers.

In order to break the chain a friend has suggested we could do the following:

1. Remove myself (higher earner) from the current mortgage leaving it in my partner's name
2. Start off the process of getting a new mortgage in my name alone

This would mean we wouldn't have to wait for the sale of the current place before making an offer on a new property and make us more attractive to sellers (particularly in the case of the repossessed property we've fallen in love with).


I realise there is a risk involved in ending up with 2 properties and not being able to afford repayments, but we are confident of a fairly quick sale and could afford it for several months.



Could somebody tell me if this suggestion is madness/not actually possible?

kingstreet

As your partner would be vetted like a new applicant to take over the existing mortgage, would he/she qualify? Is his/her credit record good and would he/she meet affordability requirements?

If so, you could carry out a transfer of equity to remove you from the mortgage and ownership of your current property and look to purchase a new one with a sole mortgage.

topherknowles

I believe it's a yes on both counts... her salary is high enough to take it on and her credit score is good.

kingstreet

You need to talk to your lender. A typical transfer of equity costs between £400 and £600.

If your incomes are high enough, you might even be able to leave the current mortgage joint and take out a new joint mortgage. You'd simply need to be able to demonstrate the ability to pay both mortgages.

There are lenders who'd take you on. Might be worth a chat to an independent or whole market broker.

Dave_Ham

As always, Kingstreet is bang on the money.

See someone suitably qualified as this is a lifetime decision. You could do as planned, you could take 2 mortgages on (subject to a few variables) you could let to buy or consent to let and keep your existing home as an investment and rent out.

All of these options would be preferable to being part of a chain I would imagine..

Do some research on repo's though, there are many implications and it could just be an easy way to lose some money...

Good luck

The_J

Do Let To Buy.

Get yourself down to a decent broker and they'll sort it for you. Not everyone is ok with it

Conrad

Dave_Ham wrote: »

As always, Kingstreet is bang on the money.

No he's not. No disrespect Dave but you keep comming out with very text book / training course style answers.

Some lenders allow a second resi mortgage without ANY need for income to cover both debts. I would have thought this by far the most straightforward option.

The_J

Conrad wrote: »

No he's not. No disrespect Dave but you keep comming out with very text book / training course style answers.

Some lenders allow a second resi mortgage without ANY need for income to cover both debts. I would have thought this by far the most straightforward option.

Who the hell allows this? Would be extremely interested to see their TCF policy.

By definition, that would be unaffordable.

kingstreet

Conrad wrote: »

Some lenders allow a second resi mortgage without ANY need for income to cover both debts. I would have thought this by far the most straightforward option.

That may be the case, but if they can prove affordability for both mortgages they will have more lenders and more rate options available to them.

As the OP's original query concerned carrying out a transfer of equity, I thought it would be helpful to give a general idea of the possibility of a further residential mortgage without going to the trouble and cost of a TofE.

Dave_Ham

Conrad wrote: »

No he's not. No disrespect Dave but you keep comming out with very text book / training course style answers.

Some lenders allow a second resi mortgage without ANY need for income to cover both debts. I would have thought this by far the most straightforward option.

I honestly do not get you or the majority of your posts. They verge from the unethical to the be down with the loonies post and usually end up talking about yourself..

In terms of text book, surely people want consistent information based upon their circumstances and a general flavour of what the market looks like.

And actually I do not buy that there are lenders that will not look at another residential properties monthly payment as anything other than a commitment.

I am happy to be corrected, but usually once challenged you float off elsewhere no doubt sharing you love and wisdom on almost every other thread you have put a random post on.

Thrugelmir

topherknowles wrote: »

I realise there is a risk involved in ending up with 2 properties and not being able to afford repayments, but we are confident of a fairly quick sale and could afford it for several months.

Suggests that affordability is an issue.

Have you looked into whether your existing mortgage commitment would increase if you switched to your partner only.