Joint Mortgage with Parents - HELP!

Tomkat83

7 Years ago I helped my parents and went into a £70k mortgage with them. I had previously been accepted for a mortgage on my own, my Step Dad was 60 and self employed so struggled to get a mortgage and my Mum has a poor credit rating. According to my Step Dad I have a 27% share in the property.

For the last 5 years we have fallen out and the relationship is now beyond repair. I have not contributed financially to the mortgage in the time. I am now married with a Daughter and am currently renting our home off my in laws, the plan is to get a mortgage on our home and repay his parents, I can't due to already being on the mortgage.

Does anyone know what my options would be? Its really frustrating as my so called loving parents did nothing but use me and have tied me into a mortgage on a property I'm not allowed anywhere near :mad:

Dave_Ham

You need legal advice, although this will be expensive.

You really need to try and fix the communication channels and ensure they realise that if you go legal it will be expensive for everyone involved.

Just as you are on one mortgage, it does not preclude you from being on another - subject to circumstances

Tomkat83

Both me and my husband and the rest of the family have tried to communicate but it really isn't happening! We are unable to get another mortgage as our earnings are too low. Thank you anyway

Dave_Ham

Not necessarily always the case.

If you want to share income and deposit, will confirm maximum pretty quickly...

Tomkat83

Between us we earn 29k and can probably get by mid next year 10k together

Dave_Ham

Obviously not sure on what prices are like in your area, although deposit will be a bigger issue for you than earnings.

You are likely to need a 10% deposit (of purchase price) and then your income should be fine upto about £100k mortgage.

Although this will be dependent upon the monthly payment for the other mortgage in question.

holly_hobby

As DH states, your presence on another mge doesn't necessarily exclude you for securing a 2nd - but it will be all down to your income, which must support both the exisiting mge and your new one (as the one with Mum/Dad is not a rental property with rental income).

Depending on the figs, you may find it better to just have your partner on the mge, with affordability based on them - which may give you a highter borrowing figure, than having you both on and the existing mge coming off (which in any event may wipe out and some, your income contribution to their affordability matrix).

The alternative is to have your parents approach the lender to effect a Transfer of Equity to release you, if this isn't possible due to their reluctance or the lenders refusal, then ulitmately you could look to have the property sold - your parents may well be adverse to this action, which ultimately would be via the courts if you wanted to force their hand. (nb - this will obv incur legal and exit fees, and would probably destroy any chance of a reconcilliation with them).

Hour or so with a decent broker will give you your available options as things currently stand.

Hope this helps

Holly

Tomkat83

Thats brilliant to know thank you.

I don't pay anything into the existing mortgage, and don't even know the details any more ie balance or monthly payments, will that be an issue in applying for a new mortgage?

Dave_Ham

It will be on your credit reports - Experian, Equifax and Call Credit

Just get the £2 versions and you will find.

Tomkat83

My income alone is 13.5k so I'm presuming my income wouldn't support my existing mortgage let alone a 2nd one.

There will never be any reconcilliation which is why I am now looking into all options, it is really sad to think it could end up in court but as family members have told me, this was a selfish act on their behalf right from the start.

If they did a Transfer of Equity would they need to 'reapply' for the mortgage? From what I understand, my Mum is now 60 and has been made redundant and my Step Dad is 67 and still Self Employed, I'm guessing they wouldn't get a mortgage based on that?

holly_hobby

Tomkat83 wrote: »

Thats brilliant to know thank you.

I don't pay anything into the existing mortgage, and don't even know the details any more ie balance or monthly payments, will that be an issue in applying for a new mortgage?

No, you mis-understand.

Legally you are jointly and severally responsible with your parents for paying that mortgage - which means that the lender can pursue all parties for payment.

The fact that you don't actually pay your parents anything is immaterial as far as mge affordability on your new mge goes (or legal pursuance for that matter).

You will have to declare the existing mge as a commitment on any app, even if you don't, it will be revealled under the CRA searches.

Hope this helps

Holly