Mortgage Query

rdg2014

Hi all,


Long time reader, first time poster.


I have recently inherited 5% of my Grandfather's estate. The value of the estate as a whole has as of yet not been identified however the house has been valued at £275,000.


I have around another £15,000 available to add to my 5%, to make a total deposit of around £28,750 (marginally over 10%).


Whilst my financial situation and credit score are not "bad" I cannot see a mortgage lender offering me a £246,000 mortgage (I have a couple of thousand owed on a credit card, as well as a Hire Purchase vehicle that whilst my company pay me to pay for, it still reflects as such on my credit score).


I have done various mortgage calculations that suggest my partner and I as a joint mortgage would be offered around £190,000 mortgage.


My question is whether the Help to Buy Equity Loan scheme would be possible in my circumstances. £275,000 home, £28,750 deposit, £55,000 Equity Loan = £191,250 mortgage (affordable and I'd hope a likely acceptance).


My immediate family have also suggested in passing they would be willing to keep a share in the property and allow me to buy out say 75% or 80% of it. Can you get a mortgage to buy out other beneficiaries? (There are 8 of us in total, children got 20%, grandchildren got 5%).


Hopefully that is enough information for people to make informed advice. Apologies for the massive post though.

kingstreet

HTB - EL is newbuild only, so that's a no.

You can't buy parts of houses. You buy it all, with a mortgage and anyone who will be an owner has to be a borrower too.

rdg2014

I wasn't aware that Equity Loan was only for new build property, so thanks for that.




Why would someone who has inherited 20% of a property, then need to be a borrower to own that 20% of a property?

kingstreet

What I'm saying is that everyone who owns a property has to be party to any mortgage on that property.

So, someone can't own 25% and not be party to your mortgage while you get a mortgage alone for the other 75%, less your inherited share.

rdg2014

Appreciate the speedy response. But to basically summarise, to buy out this property I'll need either 90% mortgage (highly unlikely lenders will deem it affordable), or a bigger deposit?

Thrugelmir

rdg2014 wrote: »

Appreciate the speedy response. But to basically summarise, to buy out this property I'll need either 90% mortgage (highly unlikely lenders will deem it affordable), or a bigger deposit?

Would appear so.

What you need to factor in is that every 1% rise in interest rates would increase your outgoings considerably. Lenders will base affordability on 6% - 7%. Low rates aren't permanent.