Is This Mortgage Scenario Possible ?

Minrich

My Daughter and her Boyfriend want to buy their own house , unfortunately he has a bad credit history which means he will not get a mortgage and if he is linked to my daughters she possibly won't get one either . So is it possible for me and her to buy it on a joint mortgage which she and him will pay ? She doesn't earn that much (about £17k) which will not give her enough mortgage to buy any house . They can afford together about £600pm which is about £110k at 4% 25 years repayment . How would her boyfriend have any legal tie to the house if he is paying half the mortgage/bills ? Also he is not putting any deposit down and me/she is putting down the whole deposit of around £30k so how do we protect our investment if the relationship goes wrong ?

Any one done this or can offer any help - Thanks

ACG

It could be possible, depending on your age and your commitments. ie your mortgage would have to be enough to support the 2 mortgages (for the lender to accept it).

With regards to protecting peoples interests, then a legal contract being drawn up would help with that.

When you say he has bad credit... what do you mean? Ive seen people with bankruptcy, defaults and CCJs get mortgages.

Thrugelmir

ACG wrote: »

With regards to protecting peoples interests, then a legal contract being drawn up would help with that.

This would then create an interest in the property by the boyfriend, who is not named on the mortgage. Resulting in all intents and purposes as mortgage fraud.

holly_hobby

There are lenders whom consider adverse credit - if you can give details, we can advise if the BF is an out and out no go, or if there will be a home for a joint application between him and your daughter.

If you/she doesn't want a joint mge with him in any event, you could arrange a separate legal agreement that upon voluntary sale (not forced possession), how the initial deposit amount, and division of free equity would be applied.

Mge wise, yes you could pch jointly with her - but as ACG states your own commitments will form part of the affordability assessment - so this may on its own throw a spanner in the works, and depending upon your age, there may be a restriction on term (ie to coincide with you reaching 75 yrs - which may or not be an issue).

Additionally, she would have to disclose that although not a mortgagor, he will be a resident in the property at completion (which may create a finanial association), to which the lender will require him to sign a consent to vacate disclaimer (this is completely standard for those residents over the age of 17, and essentially means that he has no residency rights under any possession order).

So yes, it is possible to arrange, and whilst it may not be necessary to engage a mge broker to assist, I would certainly consider one to ensure the most suitable lender and product is chose, with all points are covered.

Hope this helps

Holly x

Minrich

Thanks for the answers , a little confusing but to clarify my postion I have no mortgage and will be putting in most of the deposit . Does bad credit history increase the interest rate payable ?

holly_hobby

We're talking about your daughter's partner with the adverse/bad credit, and if he wants to be party to the mge.

We're saying that dispite this, there may still be a lender or 2 whom will consider your daughter and her partner as joint applicants.

Yes, generally, adverse lenders have a higher rate than the high st, as obviously the adverse applicant has a chequered credit history, which makes them more of a risk - the rate will depend upon how recent and chequered the history is..

Holly

kingstreet

holly_hobby wrote: »

We're talking about your partner with the adverse/bad credit, and if he wants to be party to the mge.

We're saying that dispite this, there may still be a lender or 2 whom will consider you as joint applicants.

Yes, generally, adverse lenders have a higher rate than the high st, as obviously the applicant has a chequered credit history, which makes them more of a risk.

Holly

H, it's the daughter's partner with the adverse, not the OP's.

holly_hobby

Sorry, yes had already discussed the BF in my ealier post, thanks for quickly picking up and noting, its not the OP with the issues but that they are writing on behalf of their daughter.

Criteria facts discussed, of course remain unchanged, dispite this, will simply substitute "you" for "your daughter" and "partner" for "her partner".

Hopefully that will clear anyone's confusion.

Holly

shaundiamonds

To me this depends on your commitments, income and where the deposit comes from in their eyes. If you go ahead with this they could lower the payments by taking out a 35 year mortgage.

Personally I would not commit this amount of money to someone who has bad credit history and not even saved a deposit, the risk it too high and you will probably end up having to pay for the mortgage - sorry for being so blunt but its a huge risk.