Okay...where do we start

Bonfire_Bride

I expect this is going to be lengthy, so thanks for sticking around.

I currently own my house outright - my name (along with my mothers) is on the deeds. My mum, bless her...remortgaged her property and gave us the money to buy our house outright in 2008. My husband and I pay the monthly installment into my mums account every month.

We are now looking to purchase a bigger property and my mam has told us we can use the funds made from selling this house to put down for a deposit. I don't know how much it is worth. we paid £93k in 2008.

If we manage to sell our house for around 100k, we would be looking to borrow between 60k to 70k. Looking at properties around 160k at the moment.

So...how do we start?

Do I put our house up for sale first or approach a broker to discuss everything, considering we have no chain?

Do i put down the 100k (if our house makes that much) as a deposit or do I use the equity to pay off the remortage on my mums house and use any remaining equity (possibly 30/35k) as a deposit.

We can definitely meet a further 60k mortgage payment as hubby earns 30k and I earn 20k (both with additional bonuses) Our current mortgage is 440 per month.

My husband has an okay credit report but had a house repossessed 26 years ago following a knee injury. He does have a car on finance with no missed payments. I have one default on my account that is now settled (which occured when I was on maternity last year). My credit card is well within limit but I'm still absolutely terrified of getting excited if it's all going to come crashing down around us.

Thanks for listening.

dimbo61

Start, middle and end !
Only joking
You may well end up with a Chain as you need someone to buy your home as well as buy your new home.
Does Mum want her money back ?
Can you afford a mortgage at all ? Credit history, Income, Dependants ( kids) and what size of Loan/Mortgage can you get ?
Can you afford to pay Mum back every month and pay another £60K mortgage on top ?
Under MMR they are asking how much you pay for a hair cut, takeaways, clothes etc so if you pay Mum £440 a month by direct debit the lender will want to know what this is for each month. They can and do ask for 3 months bank statements !
How much is your home worth now ?
Equity is what you get after selling property and paying back Mum.
Maybe a good idea to see a broker to see what's on the market with your history

Bonfire_Bride

Thanks dimbo!

Mum doesnt want her money back and is happy to let us use any monies made from the sale to put forward as a deposit. We live in south Wales, so cost of living is low.


After all bills are taken away and cost of living calculated - we are left with around £1500 per month. I feel this is enough to allow us a further 60k mortgage but will obviously speak to a broker.

We have a 1 year old son. No other dependants.

Oops, yeah of course we will have a chain. Doh!

Do I put house on market before approaching a broker? We can stay with my mum while searching for a new property.

I just seriously dont kow where to start.

Thrugelmir

How much was the default for ? When was it settled?

amnblog

Just engage a sensible broker and take it step by step.

It all sounds like there will be a sensible solution.

Bonfire_Bride

Thank you both.

The default occured last September and was settled approx 4 weeks ago, so fairly recently. I feel it may take some time to sell our property due to it being situated next to a pub.

I have received contact details of a broker that was recently used by a work colleague. £400 fees.

Does that sound reasonable?
Thanks again.

Senior_Paper_Monitor

To sort this one for a mortgage worth perhaps a couple of hundred quid in 'commission' (perhaps nearly double that if he/she has to a full adverse lender - but not always so) it sounds very reasonable

Bonfire_Bride

Brilliant, thank you.

Well, we sat down last night and had a chat about this. We are going to hold off applying for a mortgage for approx 6 months. This will allow time for last years default to move down the line.

We'll spend the next 6 months tackling a small snag list in our current home to make it more appealing to potential buyers. Just little things, like paint the outside brickwork, new carpets in 2 bedrooms etc.

I'll get our bank statements and wage slips together over the next 6 months too, so there's no rushing around at the time.

Anything else we will need to start getting together before we approach a broker?

Huge thanks for all your help so far

getmore4less

Is your mum declaring the money from you, some of that will be taxable income?

Bonfire_Bride

Yes. She declared everything to the council and HMRC when she was sorting out her finances prior to retiring. The council went through her bank statements with a fine tooth comb.

Well, we have found a new build (wont be available until January 2015) that has offered a part X with our house. We have approached a local broker who has requested copies of our experian credit reports. They were NOT as healthy as we had assumed.

Hubby has 3 defaults from 2007 which all have been settled. He has two defaults for the same debt - one gives the initial figure it defaulted at and the other shows the balance as 0 and settled. We contacted Experian but they have told us it is correct to be there. There is also a fully settled CCJ from 2009.
We seriously had a shock when we found his file. His car finance is fully up to date with no missed payments.

Mine is less red with the one default from September last year. I have told our broker that I dont hold out much hope and have emailed our reports to her. Maybe our LTV will help us a little. Doubt it though. I have a credit card which is maintained well and up to date with £700 on it. Mobile phone contracts all paid up to date x2.

Would you touch us with a bargepole? :rotfl:

We shall soon see what happens...