What are my chances?

Sprint955

Hi everyone. Thanks for looking.

I have been offered the chance to buy a property from my financially troubled Father In Law at a knock down price (basically just enough or him to clear his debt on this house).

The value of the house is around £115,000, and I would be looking at buying it for £90,000


I will be off to see a mortgage advisor in the week, but thought I'd ask you folks (the real experts!) first!


I earn £22k pa, would be the sole mortgagee
(I am partnered, but would rather get a mortgage based on my salary, just in case she stops working, gets pregnant or what have you).
I have been in my current job for 7.5 years.
According to all 3 CRA's I have clean records.
2 Credit cards (MBNA with 4900 limit 0 balance, Santander 2800 limit 600 balance)
But very little savings due to recent capital expenditure.


On a mortgage of £90K for a property with a value of 115K how much deposit do you think I'd need to raise, and do you think I'm likely to get accepted (I know, crystal ball time!)?


Thanks in anticipation.

kingstreet

Where is he going to live afterwards?

If he's going to continue to live in the property, you have problems.

Sprint955

He doesn't live in the property, it's a rather complicated situation!


His elderly mother lives in the property.
My partner and I would be looking at 2 options:
Having Nan-In-Law rent the house from us through Housing Support Benefit. She currently lives there rent free.
Or live there and look after Nan-In-Law.


He owns another place which is more of a building site / money drain.

Wh05apk

If you are in what appears to be a serious long term relationship, why are you even considering just doing it in your name?


5% deposit may be possible, 10% more likely, any more will get you a better rate.


As Kingstreet has said, where will your father be living afterwards?


It is likely that the lender /Solicitor will want a declaration from your father regarding his solvency, and possible an indemnity policy.

McKneff

Sprint955 wrote: »

He doesn't live in the property, it's a rather complicated situation!


His elderly mother lives in the property.
My partner and I would be looking at 2 options:
Having Nan-In-Law rent the house from us through Housing Support Benefit. She currently lives there rent free.
Or live there and look after Nan-In-Law.


He owns another place which is more of a building site / money drain.

This in bold is not going to happen.
To start, you would have to get a mortgage that allows you to let out
You would have to rent out on a commercial basis, you would be a landlord and take on all that comes with it. To get any housing benefit, you would have to do all that and be prepared to charge a going rate rent and be prepared to evict if she doenst pay the rent.
Its not that easy to claim housing beneft if you are renting from family.

Sprint955

Wh05apk wrote: »

If you are in what appears to be a serious long term relationship, why are you even considering just doing it in your name?


5% deposit may be possible, 10% more likely, any more will get you a better rate.


As Kingstreet has said, where will your father be living afterwards?

As per my previous post - he doesn't live at the address in question.


It is likely that the lender /Solicitor will want a declaration from your father regarding his solvency, and possible an indemnity policy.

His head is just above water at the moment. What would an indemnity policy cover / entail?

Wh05apk

Sprint955 wrote: »

His head is just above water at the moment. What would an indemnity policy cover / entail?

The solicitors will arrange it, and is basically to protect the lender should your fathers creditors later come back as he was trying to "dispose" of his assets.


Given the situation with your nan, I think the only way this could work, is if you live in the property and care for your nan, any rent etc would not be permitted.


p.s. I assume you are a biker?

Sprint955

McKneff wrote: »

This in bold is not going to happen.
To start, you would have to get a mortgage that allows you to let out
You would have to rent out on a commercial basis, you would be a landlord and take on all that comes with it. To get any housing benefit, you would have to do all that and be prepared to charge a going rate rent and be prepared to evict if she doenst pay the rent.
Its not that easy to claim housing beneft if you are renting from family.

I'm happy to take on the responsibility.
If we cant claim benefits for her, then i'll have to work a few more shifts, or move in with the old girl!
I certainly wouldn't evict her! Especially since part of the reason for doing this is to keep a roof over her head.


My original question was likelihood of acceptance and potential deposit requirements.

Sprint955

Wh05apk wrote: »

p.s. I assume you are a biker?

Yes I am! Luckily I run a good, reliable, trouble-free British bike.


Thanks for your advice on the mortgage. It sounds like it's going to be slightly complicated.

Sprint955

Wh05apk wrote: »

If you are in what appears to be a serious long term relationship, why are you even considering just doing it in your name?


.

Yes definitely in a long term relationship, and very happy.
We just don't want to take on more debt than we can afford (both now, and in the child-bearing future).




Just to confirm, it is my partners Nan that currently lives in the house. My partner and I are not yet married. So we (that is Me and Nan-In-Law) are not related.
Would this still cause issues in applications for housing benefit if I assumed the role of commercial landlord?

Wh05apk

Sorry no idea about housing benefits.


No reason why you can't do the mortgage in joint names, just noticed it is your father in law you are buying from, so effectively he is gifting you the deposit, that may cause problems with some lenders unless your partner is also included.