Trying to buy house with Guarantor.

McSheep

Please bear with me lol

The wife and i are in the process off buying out 1st home with the help of her parents (Guarantor's). Everything was going fine, mortgage approved, searchs done etc.. etc... Estate agents told us it would fly though (been 8 weeks now). Anyways, today we have been told that the wifes parents need to provide our solicitor with the deeds for there home, which the havent got. They have a year left on there mortgage & the lender holds the deeds and the wont realese them to our solicitor. There lender has now told them they will need to get a loan out with our lender to pay them off before anything can happen.

Does this sound about right? reason i ask is, throughout the whole process we have never been told that the wifes parents deeds would be needed and now we have compleatly stopped and no idea what to do next

thanks in advance.

Senior_Paper_Monitor

Sounds complete nonsense to me.

Who is your mortgage with ? Who arranged it ? Who is parent's mortgage with ?

Thrugelmir

Does the mortgage lender wish to place a charge over your in laws property? Presumably the current lender is declining the application.

McSheep

Hi, mortgage is with the cumberland building society & was arranged by Cumberland estate agents, in laws mortgage is with GE Money & as far as we are aware our mortgage has been approved. Nothing has ever been mentioned about a charge on the in laws property either. Im totally confused, original date for hand over was ment to be tomorrow

McSheep

It says in 1 of the letters from our solicitor :-

I note that the Cumberland have stated that they require a Collateral mortgage from mr a & mrs a over a property by the name of ................... .........

I will then require certain guarantees from their solicitors before i can request the mortgage advance from the cumberland.

Would this be why they need the deeds?
nobody ever told us that the deeds would be needed.

Thanks

borkid

When my OH stood as guarantor for my daughter the BS just needed evidence of his income. He was retired and they would only allow the mortgage to run until he was 75. He's stood as guarantor for her twice and we have never been asked for the deeds of our house.

McSheep

That's what I keep hearing, but for some reason I'm getting asked for deeds

Annisele

McSheep wrote: »

It says in 1 of the letters from our solicitor :-

I note that the Cumberland have stated that they require a Collateral mortgage from mr a & mrs a over a property by the name of ................... .........

If the lender wants your wife's parents' to give them a mortgage over their house, then that is indeed a charge on their property.

Have her parents taken their own legal advice? If not, they're likely to have to at some point during the process - to make sure they understand they're putting their own property at risk.

McSheep

Yeah they had the legal advise and know there properties is at risk, but nothing was said about the deeds until today?

Senior_Paper_Monitor

Here is what you appear to be applying for - involves a FIRST CHARGE on the parent's property ...

Option 2 - First Time Buyers Family Mortgage - with charge over another property

This product is subject to the Society taking a first charge over a suitable property of another family member to provide additional security.


5 year fixed rate (until 1 November 2018)

Loan to value Fixed rate from start until 1/11/18Then our base variable mortgage rate from 2/11/18 until end of mortgageOverall cost for comparison isArrangement feeUp to 95%3.84%4.49%4.4% APR£199This mortgage is only available to customers who live within our branch operating area.You:

• can add the arrangement fee to your mortgage subject to the maximum LTV. This must be paid initially on application and if you choose to add this to your mortgage, it will be refunded on completion.
• will receive a refund of basic mortgage valuation fee (up to £260).
• will receive a £250 contribution towards your legal fees.
• can repay lump sums without any early repayment charge (up to 10% per annum each financial year (1 April - 31 March) of the outstanding balance as at 1 April each year) - full details will be found in your KFI and mortgage offer
• will have to pay an early-repayment charge (5% before 2 November 2015, 4% before 2 November 2016, 3% before 2 November 2017 and 2% before 2 November 2018 of the amount repaid) if you repay all or part of your mortgage before 2 November 2018
• must have your main current account with the Society.

We will lend up to 75% of the combined value of the property you are purchasing and the property of the family member who is also providing security.
There are other conditions you will need to meet in order to qualify for this product - these will be explained to you in full at the time you make your application.
Fixed rate mortgages are limited issue products and may be withdrawn at any time. The maximum loan size is £500,000.


.....but if their is currently a mortgage (GE Money - which suggests other issues) on the parent's home there is no chance of this arrangement.

I can't find an Initial Disclosure document or any other indication as to whether Cumberland have advised you or not (If you have received a mortgage illustration [Keyfacts] it will tell you section in 2) but I suspect this is going be a major problem.




Again based on their website, they have an 'option one' which places a similar charge on a deposit account rather than a property.

kingstreet

This isn't a guarantor mortgage product, it's one of the newer "helping hand" type products which involve the lender taking charge over the relatives savings, or in this case, their home.

The solicitor acting for the lender will require the deeds to enable it to secure the liability over their property.

http://www.cumberland.co.uk/mortgages/first-time-buyers/5-year-fixed/family-mortgages