Mortgage/"charge" on property??

bigmomma051204

Hi all,

I currently have a mortgage advisor looking at mortgages which might be suitable for me - my parents are willing to either do a joint mortgage or go guarantor.... have received an email from his today saying that the Bath Building society might have some options but that they "insist on a charge over the parents property"...... what does this mean?? Am i being thick??

Found this on the Bath BS website but i am no clearer!!

What Security is required?
We will require a first charge over the property to be purchased. On loans greater than 80% of the value of the property, we will also require a collateral charge over the residential property of your parents. This charge will be for no more than 15% of the amount being borrowed. Where your parents already have a mortgage over their property, the value of that mortgage plus our charge must be below 70% of the value of their property.


Can someone explain in simple person terms as it is apparent i am said simple person LOL!

Conrad

Bath BS will want first charge on thier property, meaning thier property is offered as security for the loan and if the loan goes into arrears, your parents property would be potentialy repossessed.

I've had cases like this, and there are better ways of doing things. Bath BS are incredibly strict so the chances of sucess are fairly limited.

Ask your broker for other ways of going about this.

bigmomma051204

Thanks - the advisor has taken 3 weeks to respond to my last email and to be honest things aren't looking very positive :cool:

He is saying that ALL lenders who do 90% mortgages, ONLY accept repayment of the loan on an interest and capital repayment method....... and that he has discussed my situation with Bath BS, who will consider guarantor applications but they insist on a charge over the parents property......

I earn £22,000 a year and my hubby is newly self employed so we understand he cant be "counted" yet..... hence my parents (who are retired but have pensions jointly of £46,000 a year, own two properties totalling approx. £900,000 one of which has a tiny bit of mortgage left on it as they were advised to do by their lender....) offered to do either a joint mortgage or guarantor...... But from what the advisor is saying, because my dad is 67years old, the lenders will only consider EXTREMELY short term of loan thus meaning that of course the repayments will be astronomical

I wonder if it is just time to give up and accept defeat! Continue to pay £750 a month to someone else in our pokey private rent..... bah! (sorry for ranting!)

Conrad

bigmomma051204 wrote: »

Thanks - the advisor has taken 3 weeks to respond to my last email and to be honest things aren't looking very positive :cool:

He is saying that ALL lenders who do 90% mortgages, ONLY accept repayment of the loan on an interest and capital repayment method....... and that he has discussed my situation with Bath BS, who will consider guarantor applications but they insist on a charge over the parents property......

I earn £22,000 a year and my hubby is newly self employed so we understand he cant be "counted" yet..... hence my parents (who are retired but have pensions jointly of £46,000 a year, own two properties totalling approx. £900,000 one of which has a tiny bit of mortgage left on it as they were advised to do by their lender....) offered to do either a joint mortgage or guarantor...... But from what the advisor is saying, because my dad is 67years old, the lenders will only consider EXTREMELY short term of loan thus meaning that of course the repayments will be astronomical

I wonder if it is just time to give up and accept defeat! Continue to pay £750 a month to someone else in our pokey private rent..... bah! (sorry for ranting!)

Again ask your broker to try harder, there are likely other options here. Will need to be on captial repayment basis but a medium to long term mortgage is within the bounds of possibility.