Is self cert possible at less than 10% deposit?

CVID

Our son would like to get a FTB mortgage of about £100k and is self employed. We are very happy to support both his application via guarantorship (if this is relevant) and his subsequent repayments.

We have a 100% clean credit record and an outstanding mortgage of our own of £157k secured against our main residential property worth currently about £340k. We also have further properties, owned outright, worth about £400k which are let out. How much of this is relevant I don't know.

He is a 20-something jobbing musician who brings in a modest income and his accounts are in a mess, to put things politely. We ourselves have only recently remortgaged. This has left us stretched for at least a year and we are not in a position to put up any deposit on his behalf.

Is there any broker/expert in the know out there who can suggest a way to solve this?

MortgageMamma

Yes there are self certs available with just a 5% deposit, only a handful of lenders do them but they are there - what are your sons earnings?

toonfish

raise the money on your buy to let properties for his property, let him make the mortgage repayments but you can also get tax relief on the interest paid.

everyone's a winner. When he is in a stronger position he can mortgage his house to repay you.

CVID

MortgageMamma wrote: »

Yes there are self certs available with just a 5% deposit, only a handful of lenders do them but they are there - what are your sons earnings?

I want to get as much by way of facts under my belt before approaching him with any proposition, so I haven't had a chance to ask.

A bit of a chicken and egg situation but my guess is that he doesn't bring in more than £10 - £12k. On the other hand, with our help he could easily afford a monthly repayment situation of between £400 and £500.

MortgageMamma

The problem you are facing is that your sons wages are nowhere near enough to support a 100k mortgage by himself, so the only way to do it is with your help.

The things you must consider before offering to financially assist is

1, can you afford it
2. will he have to repay it
3. how long can you afford it for (i.e. are you due to retire or go part time)

You say you have further properties that are owned outright. One option would be to raise money on them

You could also look at raising some cash on your residential property if possible, but I note you say you are stretched for a year

The real problem is not the deposit but how to fund the borrowing. There are guarantor mortgages available but I'm unsure if these are available on a self certification basis - and most guarantor mortgages need some evidence that sons earnings will increase over time so often only lend to people on structure pre defined career paths

Unless one or both parents went as a joint applicant on the application and hence on the deeds I cannot see at this stage how it could be done. As you own a residential and some investment properties this could have tax implications for you.

JoeK_3

The problem is that this is not a self cert mortgage. If you decided to proceed on that basis, you would be committing mortgage fraud.

This is a straight forward parent guarantee mortgage that most whole of market mortgage brokers can arrange..

You should consult an accountant or an IFA and discuss the tax implications of raising money on your BTL properties before you proceed.

Yes, you are right to collect information and gain more knowledge before you put a proposal in front of him but it may not all be gained in here.

Take care.

JoeK