Trying to buy house with Guarantor.

McSheep

Senior_Paper_Monitor wrote: »

.....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.

So surely we should of been advised of this at the start? We don;t know what to do now, would we be able to change to another mortgage? would it be that simple?

thanks

kingstreet

I suggest you speak to whoever arranged it.

I'd be surprised if you were not advised how the product worked, as the charge over the relative's property is an integral part of the plan.

Were you given a key facts illustration and suitability letter for the product? If so, what do they say?

Thrugelmir

McSheep wrote: »

So surely we should of been advised of this at the start?

There would be an assumption that you would read the paperwork relating to the product and seek independent advice. As the lender is not in a position to advise you as such regarding the legalities and implications thereof. What form did you expect the guarantee to take?

McSheep

Thanks for all the replys, we have now got to the bottom of the deeds situation, the solicitor is going to ask GE money if they can go behind the cumberland so they can have a 1st charge on the property.

Now the next thing now is, the solicitor is saying the in-laws have to have searches on there propertie which will cost £250 approx and also land registry at a cost of £45. As far as we knew there wasn't going to be any cost to the guarantor apart from solicitor fees?
Does anyone know if this sounds right & are these searches needed?

Thanks again everyone

Senior_Paper_Monitor

I will be utterly gobsmacked if GE Money go for that !

Annisele

If the lender wants a charge (of any kind) on the in-laws' house, it's going to want searches.

I'd be similarly gobsmacked if GE Money agrees to let its charge pop down the pecking order! Stranger things have happened, but there's absolutely nothing in that for GE Money.

I think a more workable scenario might be for your in-laws to take out a new mortgage with Cumberland, and use that mortgage to repay the existing GE mortgage. That would also involve searches on the in-laws' house; the lender won't care whether you or the in-laws pay for those searches. (NB I am NOT giving advice; I don't know if that would be suitable either for you or for them).

McSheep

Sorry what I forgot to mention is there is only around £4000 left on the mortgage for a house worth around £300,000. So there will be plenty of capital for both if (which they won't) things go tits up

Senior_Paper_Monitor

Even with a year left / £4,000 (which you did mention before) I would be very very suprised if GE Money (not an organisation renowned for being of flexible or charitable nature) - or any other lender for that matter - would waive its first charge position.

I also suspect - along the lines that Annisele mentions - that there is a cheaper, achievable, and no more onerous, format to this acquisition that the current arrangement.

kingstreet

TBH I'm surprised the Cumberland demands a first charge in such circumstances. This would mean the scheme is only workable with parents who have no mortgage.

There may be plenty with decent equity in their homes, but who aren't completely mortgage-free.

Senior_Paper_Monitor

I agree with Kingstreet fully - seems a rather unattractive (or at least unwieldy) product - but that is clearly what both the OP and the website description say.

As I indicate above, their would - subject to applicant details - appear to be better solutions.