Mortgage with a guarantor

rose7_2

Hi, I posted last week about our chances of getting a mortgage. We are self employed (income below). We have seen a house that is £150,000 and FIL will loan us £30,000 deposit. We have £17000 debts (credit card) which we are gradually paying off. I have looked at my credit file and my rating is apparently 3/5. There are no problems with it other than the amount of debt. Ditto DH.

2009/10 £27,000
2010/11 £25,500
2011/12 £30,000 (estimate SA not yet complete)
2012/13 £32,500 (prediction)

Having spoken further to FIL he is happy to act as a guarantor. He has a good income (£80,000+) and owns his house mortgage free.

Is this something that could work for us? I'm planning on making an appointment with a broker next week but in the meantime am trying to gather as much information as possible.

Thanks

ACG

Nowhere will accept a deposit as a loan, it would need to be a gift - and the father in law (im presuming thats FIL?) will have to sign a form to that affect.

Im not sure your incomes would support a £120k mortgage with those debts - which will actually be £47k once your FIL has lent you another £30k.

somethingcorporate

Lots of debt, having to borrow for a deposit and approaching maximum amount for borrowing on a mortgage doesn't sound like a decent basis for home ownership.

Clear your debts and save for a deposit.

Phil_rich

Try looking into paying the cc off with the loan from FIL then going for a 90% motgage with the rest?!

DVardysShadow

Phil_rich wrote: »

Try looking into paying the cc off with the loan from FIL then going for a 90% motgage with the rest?!

Looks like money laundering. The full monty is to make normal spends on a credit card and put the money into savings while FiL pays off the card. but it cannot be done quickly enough to amass £13k in savings for a house just seen.

ACG

If the £30k wasnt a loan it could be done. The £30k would be to help them get onto the property ladder so paying off CCs and the rest as a deposit would allow thtme to do that....it wouldnt look like money laundering as it can be easily explained.

But its not a gift so it wouldnt get past the application stage.

EDIT:
Even doing the above, im not sure the figures stack up anyway. Deposit would be too small and on a 90% mortgage i think the incomes would be also.

Brock_and_Roll

Simplest solution is for FIL to buy the house then rent it for you for a few years at a reasonable rent whilst you pay off your debts. Can't see any particular hurry to get on the property market, especially as you are already fully stretched.