Mortgage problem, looking for solutions

ronniecat

Hi, I'm looking for a flash of inspiration!

We are trying to buy a house but hitting brick walls when it comes to a mortgage.
We have 10% deposit but my husband doesn't earn enough for the whole mortgage, and history wise, the credit rating is a little wonky (small business recession victims!)

In order to be able to buy anywhere around here (where house prices are high) we need some help.... And we have a family member willing to invest with us and give us a considerably higher deposit (40%).

The problem is this, for my husband to go on the mortgage alongside our family member, it would need to be a residential mortgage, which 2 mortgage brokers say cannot happen because it would be a second residential property for the family member, and that is not possible.... Apparently, he would have to say he was moving in/living there, but he won't be.... and he won't lie (works in law) which is fair enough.

Secondly, the family member could buy the property as a buy to let and technically, rent it to us, however, the property is cheap because it needs a total renovation - this means that it would be valued for rental and in its current state, wouldn't value up to get that mortgage.

A mortgage advisor friend says that although my husbands credit rating is 'fair', he could do with another year of good credit to be able to stand a better chance of getting a mortgage on his own.... Even with a 40% deposit.

Any way around this problem? I thought getting a second residential mortgage in joint names would be fine for only one of the party living there, but apparently, that's not the case..... And we have to be legit as family member is whiter than white..... Help?

Dave_Ham

I would fancy a solution here, although it will depend upon the detail.

What is the wonky credit your refer to?

Is it missed payments, defaults or worse?

You may well require your Experian, Equifax and Call Credit records to know the dates and exact information.

kingstreet

ronniecat wrote: »

my husband doesn't earn enough for the whole mortgage, and history wise, the credit rating is a little wonky

What you get out of this forum is completely dependent on what you put in. If you set out exactly what you need and your circumstances, you'll find the answers are less speculative.

So, specific information on income and credit issues, please.

we have a family member willing to invest with us and give us a considerably higher deposit (40%)

Invest? Give? Is this a gift, loan or what? Is this conditional on the donor being party to the ownership, do they want a charge over the property, could they be a guarantor?

the family member could buy the property as a buy to let and technically, rent it to us, however, the property is cheap because it needs a total renovation - this means that it would be valued for rental and in its current state, wouldn't value up to get that mortgage

It would be a regulated BTL which would cause your pool of lenders to contract dramatically and if the property is in poor condition, is it suitable security for any mortgage? Could you cope with a retention?

ronniecat

Well, we had a couple months mortgage arrears at one point over a year ago. A few late payments etc. we went through a really bad financial patch but everything settled, no CCJ's - his credit file coma out at 'Fair'. Earnings of approx 65k a year, property purchase price 400k

The investor is a family member who is willing to help us, ultimately no charge over property, it's not complicated in that way, i guess it's money that will eventually come my husbands way at some point anyway.

The property is habitable, we would move there as a family, but requires complete modernisation. We could cope and do it over time, a tenant obviously couldn't!

Dave_Ham

I would have a free chat with another broker, as this looks achievable on the face of it for sure.

All the best