Complicated First Time Buyer Query - any advice appreciated

joe_rides

Hi All,

This is my first post - i thought i would sign up to look for advice on my complicated mortgate situation, as follows:

When i was 18 (now 27), my father was going through a messy divorce and as such, in order to save his house, i was asked to sign on to the deeds of the house and the mortgage (he needed two people on the mortgage - i'm not 100% sure why).

I've never been asked to pay any money etc, it was just a formality and was intended to be short term. The mortgage is around £100k, and there is also a £10k solicitors charge on that. My father is on an interest only mortgage.

Nearly 10 years have passed. I have a good job, and have been saving for about 6 years. I have a healthy deposit saved.

I want to buy my first house. I am assuming that this is going to be hard as i have a £100k mortage already technically - is this correct?

My father is extremely embarrassed about the situation and has told me that he will sell up if needs be, however 1) it's his beloved house, which he has fought to keep on more than 1 occasion, so i would feel guilty to force him to sell - he can't afford another house anyway - and 2) his mother (my gran) is currently very ill and as such my father is living at her house and providing 24 Hr care. He literally doesn't have the time to get involved at the moment.

I would be extremely appreciative of any advice on what i can do. Is it possible that i could get a mortgage if we prove that i have never paid any money on my fathers?

Is it basically a lost cause for me to buy a house until my father sells up?

Any queries please let me know, sorry for the long post!!

Joe

ACG

Is he earning an income at the minute?


How much is your income? How much do you want to borrow?
What will happen at the end of the interest only mortgage - does he have a way to pay it off?

joe_rides

Hi ACG,

My father is on a disabled allowance. I'm not sure of what income this generates. When the interest only mortgage runs out I honestly have no idea what he intends to do. My assumption would be that he tries to renew on the same terms with the same lender.

I'm on £30k. I haven't gotten my hopes up by viewing houses etc however I would probably be looking at between £80 - 100k for my first house. I would put at least 10% deposit down, probably 20% if i could afford it.

I also don't know whether i will buy with my partner or not. That would be another conversation i guess! For now i am raising this query with a view to buying on my own.

ACG

I think you need to have the conversation with your dad, speak to the lender to see if extending the term is an option at the minute (i dont think it will be personally). You need to know what options are out there and plan for it... things can change but at least if you have an idea it will help.... not the best conversation to have but one that is needed.

As far as you are concerned, i would say your income would allow you to get a mortgage of around £120-150k, however £100k of that is being used up already. You may find a lender who will ignore it on the basis of it being paid by your dad and a history of it - but i would not be confident on that front.

Adding your partner to your mortgage assuming she is working would help you get what you need.

Another alternative with your dads house would be for you to get a regulated buy to let - this will allow you to put it on interest only for a longer period. The house then becomes owned solely by you, your dad can then either pay you rent/pay the mortgage or whatever you agree between you... this will impact on your affordability but potentially not there is one or 2 lenders who will do regulated BTLs and take into account the rental payments from the tenant.

Definitely one for a broker this to look at the options available. There could be an answer or you may find you struggle but with a bit of leg work i think there will be a ways and a means.

joe_rides

Many Thanks for your valuable advice.

It's as i thought to an extent but it's good to confirm my thoughts and also learn a bit more about what could happen.

It's not easy having "that" conversation at the moment due to the situation with my Grandma, but it does need addressing sooner rather than later. Ill then find a broker to give me all of the options available.

Thanks again.

ACG

The timing is a problem, but the good news is that there is potentially a way forward that will mean you can do what you want (buy your own place) and your dad can remain in his home.