Can i put my dad on a second mortgage til we sell?

brumbird_2

Hi

We have found a house we want to move to, our house is on the market but they wont accept our offer til we are sstc (fair enough)
They have got someone else interested now and we are looking at our options, our agreement in principle is 188k, but we only need 140k. Our current mortgage is 79k. Simple maths says i am only 31k short. Can my dad come on the new mortgage until we sell our house to bump it up to what we need to run the two together for an interim period? Or is it more complicated than that?

I can speak to my mortgage advisor but not til tuesday and its going round in my head, just wondered if anyone could give me a general idea.

Thanks folks

anselld

It is not that simple. You cannot own own two properties on a single mortgage. It is not simply a question of income multiples.

brumbird_2

I am suggesting that we keep our 79k mortgage and take out a new one for 140k. Our agreement in principle is 189k - i realise thats for one mortgage but isnt it an indication of our borrowing capacity?

Thrugelmir

79k + 140k = £219k in total

brumbird_2

Yup 189 is what hubs and i can jointly borrow, which is why i am asking if we could include dad on the mortgage as well to get us to 219.

mrginge

There really is nothing more to be said than 'No you can't'.

brumbird_2

How come? Is it the specific circumstances? If we wanted to jointly invest in a property with family members, we could be named in a second mortgage couldnt we?

Am just desperately trying to avoid a bridging loan as that seems like a minefield.

Mattygroves2

What you would be doing on the second property will be viewed as a transaction in it's own right. So you'll need a cash deposit (as you haven't released the equity in your existing house) and your a Dad would be a part owner with (presumably) no intention of living in it so not a straight forward residential mortgage. If you could find a lender that is happy with this arrangement then both yours and your Dad 's outgoing and existing commitments would be considered to make sure both your own existing mortgages and commitments could be covered as well as the new one.

Given the extra risk of you servicing two mortgages I'd expect the maximum available to you to be a lot less than your AIP. Also even if there were no complications there is a good chance that they will reduce it anyway.

Simplest solution is to reduce the price of your existing house so that it sells quickly.

spidereyes

brumbird wrote: »

Hi

Can my dad come on the new mortgage until we sell our house to bump it up to what we need to run the two together for an interim period? Or is it more complicated than that?

Thanks folks

Others have already given good advice in respect of the mortgage side if things.

In respect of having two properties at the same time, can you genuinely afford this in the long term even if you could get a second mortgage?
Any solicitor will strongly advise you against this.
Buyers can pull out at any time up to exchange of contracts so even with an offer on the table there is no guarantee that the sale would proceed.
What if you had the house on the market 3 months before an offer, then a buyer messed you around for weeks, they end up withdrawing and the property ends back up on the market for the process to start again. You could be looking at a year or longer to sell your current home.
Everyone seems to think that it won't happen to them, trust me it is massively common.

brumbird_2

Thank you both very much for the genuine advice.

We have £35k cash that needs to be used for a deposit on the new house (asking price is 175) we were trying to work out if dad could buy our exisiting house from us (or transfer it into his name to free us of the financial committment on paper) but as there is a mortgage on it he would have to proceed with getting his own mortgage to buy it and would need his own deposit. If we sold to him at 79k he could get a mortgage for that (hes retired and mortgage free with 2 properties) but he wouldnt be able to raise the deposit because all his spare cash is in the aforementioned 35k (my dad is ace)

Barclays mortgage calculator suggests me and hubs (without dad) could borrow 230, but that was bazed on us releasing approx 40k equity from the sale of ours to put into the cash pot. mortgage advisor rightly advised caution and not to max out.

Ive taken on board the advice to lower our asking price, and to proceed with caution given that we may not get a sale in the short term. Just mulling over the options really.

ethank

When I moved, my mortgage offer for my new house said that the offer was dependant on me redeeming my existing mortgage ING Direct/Barclays Direct.