Please Close

mew

Thanks for the replies to my questions, Our circumstances have changed slightly, hence request to close the thread.

ethank

mew wrote: »

As a last resort, Is it fraudulent to get my partner off the mortgage (i.e. pay it off) and then for her to apply for any of the help to buy or shared housing schemes etc (we don't want 2 houses, we just don't want to sell until we have another house and renting would cost 3-5 times as much as our current mortgage and we would have 2x removal costs)?

Just taking name off the mortgage is not enough as your partner would still be on Land Registry.

holly_hobby

First question , can I ask WHY you think/have been told that since your purchase, its become unmortgagable ? (has this come from a professional survey or qualified advice ?

Setting that aside for the moment, if you are not letting property no 1, then the mge commitment will be included in any affordability assessment on your new home - as even if you don't live there you still have to meet the mortgage payments !

You're therefore thinking of removing partner from property no 1 mge, in order for her to apply for a new mortgage in her single name for property no 2, and thereby avoid having mortgage no 1 included in the mix on your new mge arrangement.

If this isn't going to become a letting unit, then in order for her to be removed from your current mortgage, your mortgage lender will want to ensure that YOU can service the mge on your own income - if they aren't happy this is possible then she can't be removed.

Do you need to sell prop no 1 to fund your new deposit ? (setting aside the schemes discussed).

If not, then a way round this (given if unmortgageable, it could be a slow sale if you don't price accordingly, or go to auction), would be (under consent to let from your current lender) to let the unit out.

Which means that if self sufficient (ie rent covers mge etc), then with the right lender this commitment will be set aside (ignored) from the affordability assessment under a joint application (subject to status etc).

This would then give you more time to sell (although you would obv need tenants permission for viewings, and you need an AST to ensure you're buyer can obtain vacant possession), but it could depending on other factors, be a solution.

Of course you would need to be happy to be a landlord (temporary or longerm), and report net rental income to HMRC etc (no cgt assessment if you sell within 36 mths of vacating) ... if this suits, speak to your own mortgage adviser about how you may take this forward.

Hope this helps with another viewpoint.

Holly x

mew

While I haven't had official advice yet, The condition of the house combined with it's non-standard construction (BISF, metal pre fabricated) leads me to believe it's essentially unmortgageable (it may be possible through a specialist and with repairs completed). One note though is that our bank/mortgage company refused to insure the house a couple of years after purchase, currently specialist insurance is twice the price compared to a brick built house.


There is no way I would get passed at the moment to cover the mortgage on my own, so the only way I could do it is with my credit cards or possibly a loan but this is less than ideal and I'm not sure if my debt would affect my partners chance of getting a mortgage on her own?


We don't mind the lender taking into account the 1st house, I think they worked on £240 pcm unoccupied and we would not miss the payments to spoil our credit record, It just seems though having a house already is the biggest problem we have, more so than the credit card debt.


We have considered letting but aside from the tax implications, we assumed the house (without extensive work) would not meet current regulations for letting properties. Also we don't know how cooperative our lender would be in regards to letting us rent without changing our mortgage product (currently 0.59% above base rate tracker for life).


We would not need to sell the house for the deposit (10%) although looking at other posts, the source of the deposit may be due for some scrutiny. For us personally the deposit is a loan from my partners parents, repayable upon selling house 1 or through some shares we are able to sell next year. As far as the lender is concerned, it's a gift.

ethank

mew wrote: »

We would not need to sell the house for the deposit (10%) although looking at other posts, the source of the deposit may be due for some scrutiny. For us personally the deposit is a loan from my partners parents, repayable upon selling house 1 or through some shares we are able to sell next year. As far as the lender is concerned, it's a gift.

The parents would have to write to the lender saying that it was a gift, and that they had no interest in the new property. Could they comfortably do this if it is not the case. Is it mortgage fraud if they do?