Help me! Equity or Gift.... it's complicated!

Katy1980

Lender: Natwest

Estate Agent (where mortgage adviser is): Manning Stainton (we are not linked to Manning Stainton in any way as we didn't buy or sell through them - the mortgage adviser is independent and just works in their offices like most advisers tend to do) She works for the Mortgage Advice Bureau - so I've also managed to email the person who my mortgage (at the MAB) has been forwarded to. Although she doesn't seem too clued up so I'm not sure that'll help....

amnblog

MAB should have management to handle this for you - put it on their toe - good luck and keep us informed.

Katy1980

It sounds to me like the only way this will go ahead is if I find a lender who will accept the deposit is from equity of a joint mortgage - or if my partner and I split up (so she won't be living at the new house). It's crazy when (hypothetically speaking) I could meet someone new a few months down the line who moves in - contributes to the bills and is likely to have possible rights to the ownership of the property anyway! Anyway, I digress - I'm not interested in that sort of situation of course!

Katy1980

I think the thing I could do with knowing is if it's considered a gift from my partner (her half of the equity that we are using as a deposit) and she writes a letter saying she has "no financial interest in the property" then isn't that OK even if she lives there?

Also - if my lender does not accept this - will there be lenders who DO? Or are all my chances foiled by damaging credit checks etc? I've was told by my mortgage adviser last week there have only been 2 checks on me which won't cause damage - so I maybe over worrying there!

Or - if I can prove that I made all the overpayments so that at least 70 or 80% of that deposit is from me - would that help?

I cannot lose this house! My partner has an autoimmune disease which is exasperated by stress. We are moving to the country to make sure she can have a nice relaxing life which can make her somewhat disabling illness go into reverse. (Not looking for sympathy here - just trying to justify why I'm so worried and how important it is!)

Thrugelmir

Katy1980 wrote: »

I think the thing I could do with knowing is if it's considered a gift from my partner (her half of the equity that we are using as a deposit) and she writes a letter saying she has "no financial interest in the property" then isn't that OK even if she lives there?

So blindlingly obvious that is purely to get round the rules. Being a letter you could agree to terminate the agreement the minute you own the property.

Wasn't a joint application a possibility. Given that you can afford the mortgage in your own right?

Katy1980

That's what we wanted initially but my partner set up her own company November last year so doesn't even have a years accounts (let alone three which most lenders require) hence why just do it in my name....

Unless I can still have her name on the application - but as she cannot prove income it means I have to earn enough to fund both of us in the lenders eyes (regardless of the fact that my partner is earning a decent living) and considering the loan I'm allowed (I am only JUST allowed 202k) then that's not going to work is it? (Assuming that's how it works as I'm not sure)

I think my credit rating isn't anything special (no arrears or late payments - but I don't have any debts - which annoyingly goes against me). I just have a few credit cards that I pay off in full each month. We are very financially stable and can afford the mortgage repayments three times over - yet my "lendability" is (only just) 202k! The system is an absolute joke!

koexelek

Thrugelmir wrote: »

So blindlingly obvious that is purely to get round the rules. Being a letter you could agree to terminate the agreement the minute you own the property.

Wasn't a joint application a possibility. Given that you can afford the mortgage in your own right?

Problem these days, is if that you put someone on a mortgage who the lender deems to not have an income, they will be classed as a financial dependent on you and mean you can not now borrow as much.

Katy1980

Yes, that's spot on what I thought/meant (I'm just not as good as you at explaining it, ha ha!)

In a nutshell. If my partner hadn't set her own business up and was on a payroll for any old company out there then this would have been very simple....

Also - I was (about a month ago) offered 390k on my own (agreed in principle) which even with a "dependent" perhaps could meant it would have been fine? (or maybe not as they do affordability checks) - yet it's since gone down to just over 200k that I can lend. What's that all about?! I think they based it on my last 3 years of profits - but then looked at my drawings/dividends and brought it down (because - like most Directors - I take up to the amount below high rate threshold)

My lender changed too.... (originally was Accord at 390k) Perhaps my MA simply did what was cheapest on cost (as they should) - as interest rates did change in the meantime.... Please someone tell me there's a way out of this!

I've a terrible feeling the only way we are moving is if we get a joint mortgage in a much, much cheaper house (dream house out of the window) 7 years of working till 2 am every night to reach this situation and it has just been pee'd on!

Katy1980

I know I'm going oooonnnn and oooooon but can someone please confirm (a mortgage adviser preferably) my worse-case scenario....

Say we cannot get this mortgage (for the earlier mentioned reasons)

Then we can:

1) Find a lender that WILL allow this (is there such companies...? Perhaps it just means a rubbish interest rate from the 2.5% I had before... Sigh...)

or (the worse-case)

2) Would we be able to get a mortgage in BOTH our names - even with no income considered for my partner? (As my partner has had her company about 8 months she'd be consdiered zero income - making her a dependent to me -hence reduce my lendability - meaning we'd buy a cheaper house)

Usually you can get 5 x income - but anyone know how much that would reduce by with a "dependant"? I'm thinking that it may be about 3 times income - so we'd get appx 215k house (that includes our 88k deposit) Plus we'd save about 8k in stamp duty from the previous house we wanted so then it'd be more like a 225k house...? I REALLY hope it doesn't come to this option!

amnblog

Katy

MAB have caused this complication and you should leave it to them to sort it out.

Without knowing the case in full we cannot speculate as to the best solution but it sounds very much like unless action is taken this purchase will come to a halt.