Increasing mortgage amount

katgirlie

Hi all, first please forgive me if I don't use all the right terms for these things, hopefully you'll get the gist of what i'm talking about and be able to offer some advice. Second, apologies for the epic post, but I need to explain a bit of background.

Last year, my fiance and I bought our first home. Our dream home, in fact, and what we hope will be a forever home (or at least until we retire somewhere fabulous!). We were extremely lucky that his Dad offered to lend us a substantial amount of money to help us do this. The plan was, he would lend us initially 50% (yes, 50%) of the value of our house and live with us for 12-18 months while he sorted himself out after his divorce. At the end of this time, we would remortgage for a higher amount, he would take back all but £20k or thereabouts, leaving us with (including what we'd paid off) 15% equity in the house (therefore better interest rates) and a larger mortgage.

Last month, fiance's Dad bought a house, quite out of the blue. (In fact, his offer was accepted on the Thursday and he didn't even mention it to us until the Sunday.) We realised that this meant that he would need his money back and we'd need to get our financial ducks in a row, but on the Tuesday he went on holiday to Australia for a month. We agreed that we'd look at the figures when he came back, because what we'd need to borrow would depend on how much he was willing to leave in our house.

He returned last week, and this morning dropped the bombshell that he wants ALL his money back, and he wants it within 2 weeks.

To pay back all his money would leave us with only 5% equity/deposit/whatever it would be called. We'd need 95% LTV.

So my question is this: should we speak to the current mortgage lender, or seek a whole new mortgage? We have already been paying overpayments each month which would be roughly what the repayment would be on the larger mortgage so it should demonstrate that we can afford it, although maybe on salary ratios it might not appear so. What should our first step be now?

Sorry again for the massive post, i'm not sure how much detail was needed but hopefully someone might be able to advise.

Thanks

mr-bob_2

I'd be very suprised if you'd be able to get a mortgage at 95% LTV either with your current lender or with a new one. Don't forget early repayment penalities if you remortgage also.

I'd see a local reputable broker (make sure he can do all products, not just a selection) if I were you, and explain the situation and they'll tell you your options.

katgirlie

Thank you. I think we're in a very bad situation indeed.