A 2nd Mortgage?!

MrsAandBaby

Hi,

My mum is taking a mortgage in her name for me as I have a bad credit rating, from previous debt that I have recently settled. She is under the impression it can't be a straight forward mortgage with a 10% deposit and that it would need to be a 2nd home mortgage with a minimum 25% deposit. Is this right even though she doesn't have a mortgage on her own property? If anybody can clarify that would be great. We live in Scotland in case things are different here.

Thanks

kingstreet

A mortgage for a second property may require a bigger deposit, even if the current property is unencumbered. Is she raising the money on her property, or on the new property?

MrsAandBaby

Basically we are selling our home and using the profit approx 10k to put down on the 2nd property. I wasn't sure if it would matter or mortgage purposes that her home is mortgage free?

kingstreet

So, the mortgage is being raised on the new property?

Many lenders will set a lower maximum loan to value, for example Nationwide (85%) and Abbey/Santander (80%) so you need to take care in picking the right lender.

How old is your mother? Does she have the time to retirement and income to make this affordable?

MrsAandBaby

Yes, she has 16 years until retirement so can take a 15 year mortgage. She has spoke briefly to a mortgage advisor today who advised re the 25% deposit, and I was unsure if he realised that her own property dint have an existing mortgage.