Shared Mortgage + Own Mortgage, is it possible?

LAEllis

Just a quick question,

An opportunity to buy a family home has come up, with 2/3 family members and we are considering getting a joint mortgage. Council discount should allow us to pay it off relatively quick.

My partner has raised the issue regarding how much it would effect us (partner and I) getting a mortgage of our own in the future.

I expect the shared mortgage to be around 120k, assuming the new house (ours) to be about 150-175 with a 10% deposit (15-17.5)

kingstreet

If I might go back a stage, do you live in the council property and have you done so for at least 12 months?

If you don't, you won't be able to join the right to buy to purchase it.

If you later wish to apply for a mortgage, the one you are currently party to will be treated as a credit commitment and the monthly cost deducted from your affordability for the new mortgage. Consequently, you may be able to borrow less.

LAEllis

kingstreet, I do not but my mother does and has done for 12 or so years, she would have to be on the mortgage i assume?

in terms of the deduction, is that the whole mortgage (say £800pm)or my share (200-300)?

kingstreet

The person named on the tenancy is the one who will apply to buy the property and be named on the mortgage. An older person may have difficult borrowing over a long enough term to keep the payments affordable.

If you are not named on the tenancy, you will not be able to buy the property. There are one or two lenders who will allow more mortgage borrowers than there are to be named as owners on the deeds, although the obvious disadvantage of doing this can't be avoided.

A mortgage is a joint and several liability, so the full mortgage cost will be deducted from your affordability. At £800 per month, that means you'll typically lose around £40k from your borrowing power.

LAEllis

kingstreet, thanks very much.

just to clarify, i have to be on the tenancy for more than 12 months in order to buy it with my mother/family. (even though she has lives for xx amount of years)

kingstreet

Sorry. I may have misled you slightly between my last two posts. You don't have to be named on the tenancy. You have to have lived in the property for 12 months plus.

Here's the guidance note from Tower Hamlets;-

Sharing the Right to Buy with your family

If your family live with you and have been living in your home for at least a year before you submit your application they may be able to share the Right to Buy

I found that by googling. You can find your own area's RTB policy by googling the district name and "right to buy."