Small Mortgage/loan possibilities

blondie1982_2

Hi
I am after some help if possible!
My partner and I live in a house that was left to him by his father who passed away August 2011. The house is still currently in his mum and dads name (his mum is still alive by the way).I owe my mum 15000 and wish to pay her back as my step father passed away last year so she doesn't have the money she once did. Where do we stand with taking out a small mortgage/ secured loan against this house? My partner doesn't have a fantastic credit history and I understand that we need to get the house in his name too. He is also currently not working due to him handing his notice in recently, but we hope to get him back into work ASAP.
Not sure what our options are, if any! It's not immediately urgent but would like some help in preparation if possible. There is no mortgage currently on the house.
Any help would be appreciated.

ACG

To be blunt, very slim.

You dont own the property so you cant secure a loan or mortgage against it.
Im not sure what your income status is but if your not working then you have no incomes to support a loan either. If you do have an income, then your only shot is a personal loan to pay off your mum - tesco/sainsburys have what seem to be quite good rates.

Thrugelmir

Rather than borrow money. Why not repay your mother directly every month instead?

ACG

Once the house is in your partners name, then you can probably do it yes.

Although, if your mum is struggling financially, i would be wondering how much £15k is going to help long term... its none of my business and im not really after an answer but it could be something that needs discussing with her?

ACG

Wait until the house is in his name and he has a job and then go and see a mortgage broker?

Just to note, he doesnt have to have been in the job for 6 months. Some lenders will do it in 3 months or less... being in the job for 6 months will open you up to more options though.

kingstreet

So, the property was left to the son, but the mother is still alive and does she continue to reside there?

The property is currently in the name of the deceased father and living mother?

Is this property held as a joint tenancy or tenancy in common?

The answer to this question is going to open up a whole load of issues over who actually owns this property. If the mother is a joint tenant, or a tenant in common, she is going to remain at least a part owner. How did the father think he was leaving this property to his son on death?

I suggest some attention to this, before any attempt to borrow using the property as security.

JassV

Hey Blonde1982,

I am not sure if this is possible but worth checking with someone professional. Your other half may be able to add his name onto the house and remove his fathers. That means him and his mums is still on it. I think that term is called ‘power of attorney’. If that is possible then that would mean a new mortgage doesn’t need to be taken out and still stays on the same terms. I know ideally you’d like your name on it but I guess for now once his job has become idle then later on you may be able to add your name on and remove his mums. That way you’re taking over the property and mortgage payments and it’s a case of just changing the names over.

It may be more complicated than that but worth asking a good solicitor if that is possible.

Jass

JassV

oops, that was supposed to be blondie1982 not blonde, lol

kingstreet

Right.

So, let's assume the property was held as a joint tenancy. On death, the property would become the property of the survivor - the mother.

She would have to gift it to the son, carrying out a transfer of equity, repaying any mortgage in the process.

He would then, once it's transferred into his sole name, be able to approach lenders for borrowing, subject to;-

- a lender willing to remortgage an unencumbered property
- a lender not enforcing the six month rule
- a lender willing to accept his credit problems
- a lender with a low minimum loan
- a lender willing to accept a short employment period.

I suggest you get hold of all three of his statutory credit files;-

Equifax

https://www.econsumer.equifax.co.uk/consumer/uk/order.ehtml?prod_cd=UKSCR

Experian

http://www.experian.co.uk/consumer/statutory-report.html#orderReport

CallCredit

https://www.callcredit.co.uk/stat-report-online/index.php?action=basket_add&tpl=setRegister&package=63&amount=1&mode=clear

which you should take along to a meeting with a good independent or whole market mortgage broker. Ask friends and relatives for a recommendation. Failing that, use https://www.unbiased.co.uk remembering to switch off "sponsored ads only" option so you get a full list, not just the paid-for adverts.

The £2 statutory paper files will be fine. Avoid online schemes you have to pay for which give you your inside-leg measurement and call it a "credit score." These are pointless in these circumstances.

kingstreet

A "mortgage" is normally another name for a first charge, where the lender has the first call on the value of the property in the event of default.

A secured loan is normally a second charge, where the lender sits behind the mortgage lender in the pecking order. As a consequence, the rates aren't as good.

As you will have an unencumbered property, ie no mortgage, the secured loan would have a first charge, but probably still want the higher rates. It may be worth checking that you can get such a loan with no existing mortgage. This isn't my area, but I do recall some years ago a secured loan firm refusing to lend where there was no "first" mortgage.