urgent - advice please - family home mortgage application - business 'exemption

GMS

Which parents are gifting? Yours or partners? You say 20k of OUR money. Providing the deposit and not being party to the mortgage will be an issue.

Frankly your broker appears to be a clown.

How much are you borrowing? What is the purchase price? What rate are you being quoted? What fixed term (if any)?

Skipton SVR is high so you need to consider where you will be at the end of the initial term. If you are struggling to obtain the finance now you may well find yourself trapped on a high SVR rate.

Midnight_Tboy

Hi.

When I say our money, it is mine/partners savings, in a joint bank account with my partner. So in that bank account it is my salary, and our joint tax credits/child benefit income, and then of course the regular spending to and from.

Borrowing 70,000, purchase price of 110,000, on a 5 year fixed. Being quoted 3.59% with Skipton (the original best deal based on them using the tax credits was 3.09% with a 499 fee at Nationwide).

At the end of the initial term I'll be definately looking at changing to a more competetive rate. Also plan to pay 10% in overpayments each year. The monthly payments end up being less than what I'm currently paying in rent, so should be able to save for the overpayments without much issue

Because of the original mortgage application being messed up due to tax credits, I have been told I will be refunded the 2nd valuation I need to pay to skipton (£181) once an offer has been made

edit: sorry.....forgot...the gift is from my parents also, and the mortgage is for 25yrs (with intention to try and clear it in 10, 15 tops)

Annisele

Midnight_Tboy wrote: »

When I say our money, it is mine/partners savings, in a joint bank account with my partner.

In that case, you're going to have serious issues trying to take out a mortgage in just your own name.

I agree with GMS - either there's a miscommunication between you and your broker, or he's a clown.

Midnight_Tboy

Also, I did find a better deal myself, on hunting around, with FirstDirect, however that risks extra up front fees, and also the EA broker is only part of the market....so whilst I could break away, I then would have extra delays, extra fees because of the valuation which is agreed to be refunded etc, and I just want this to go through smoothly, as there have already been people trying to gazump us, which the sellers have politely declined due to us having paid out already in the hopes it will go through quite quickly

Midnight_Tboy

Annisele wrote: »

In that case, you're going to have serious issues trying to take out a mortgage in just your own name.

I agree with GMS - either there's a miscommunication between you and your broker, or he's a clown.

That sounds very worrying

I did show all statements etc to the broker, and copies were taken. They've never raised issue about the bank statement having both our names on.

I do also have 2 separate bank accounts in just my name, tho only in the region of 3 or 4k sat in them at any one time

Midnight_Tboy

I scoured through the KFI I received, no mention of Buy To Let, all appears to be fine in that respect

I rang up the broker, asked if was correct form, where they checked, and said that the form is fine, it is just agreeing that we're signing to deal with Skipton, and not that it is applying for a business based mortgage (for the purpose of using the place as part of a business which was how I was interpreting reading the message).

I asked also about the issue we had with the tax credits, and our bank account being a joint bank account in both names and she said that would not cause an issue.

Man....this stuff is stressful!!

GMS

Speak to the broker, they may have had this agreed with Skipton up front.

However providing some or all of the deposit whilst not being party to the mortgage and residing in the property is an issue. It can create overriding interest.

I would have thought the best course of action would have been to do a joint application with your partner and using the additional income from tax credits. As it stands now she will be classed as a financial dependant anyway.

Solicitor will need to check the source of deposit so will most likely report to the lender that it is joint savings.

You really need to ensure this application has been done properly to avoid issues at the back end. Doesn't sound great so far unfortunately especially as the broker didn't see an issue with the funds.

Clearly you have concerns anyway but they may be deeper than you initially imagined.

Midnight_Tboy

Thanks. Based on what they told me on the phone, I've signed it now anyway....hope I've made a right call.

Very concerned now about the whole bank account issue, last thing I want is another reason to fail They seemed convinced this wouldn't be an issue however as the money in account belongs 100% to both us ous owning the account, rather than say a 50/50 share for example. There is in the region of 35k spread across the joint and 2 x single named bank accounts/isas. If I was to withdraw now, then I'd have to start from scratch with another broker or direct with a bank/mortgage company....and so would have extra admin etc fees to contend with and delay the process even more.

Potentially, if an issue does arise re the joint bank account, would a work around not be having my partner declaring the other 20k as a 'gift' even tho that is effectively from my own wages?

When I heard that moving house could be one of the most stressful things you do...I thought it was referring to the physical moving, rather than just trying to buy it!! Ideally I'd be in the house next week if I could!! Moving isn't much of an issue either as its walking distance

GMS

If there is an issue it will be providing funds, not being party to the mortgage and residing so gifting it will not help.

A gift from your parents is fine because they won't reside in the property.

I hope your broker has agreed this with the lender.