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Help To Buy Problem
mickflynn39
Posts: 174 Forumite
My daughter and partner have exchanged contracts on a house using a Help To Buy equity loan based on their joint income. Unfortunately he has decided to end the relationship just before completion. My daughter earns £13000 per annum with about £6000 commission. I've been on mortgage calculator websites and it would seem 4 times her salary and commission is what she could realistically expect to get on a mortgage if she was applying on her own. This would give her a £76,000 mortgage potentially.
The problem is that the mortgage is £102,000 which she could actually afford but the building society (Nationwide) won't probably see it this way.
What are her options? Will the Nationwide let her carry on with the mortgage if we guarantee payments? Will they want the mortgage reducing down to £76,000 so the bank of mum and dad will have to find £26,000 for her? Would they extend the mortgage term to 35 years instead of 25 as it is now to reduce her monthly payments? Will they let her partner come off the mortgage and let us buy him out or will they want him to stay on it so he is liable for any debts if she can't pay the mortgage? (this wouldn't happen in reality as the bank of mum and dad would ensure her payments were always met). I'm assuming they won't let mum or dad go on the mortgage in place of her partner as we don't qualify for Help To Buy.
Any advice would be much appreciated.
The problem is that the mortgage is £102,000 which she could actually afford but the building society (Nationwide) won't probably see it this way.
What are her options? Will the Nationwide let her carry on with the mortgage if we guarantee payments? Will they want the mortgage reducing down to £76,000 so the bank of mum and dad will have to find £26,000 for her? Would they extend the mortgage term to 35 years instead of 25 as it is now to reduce her monthly payments? Will they let her partner come off the mortgage and let us buy him out or will they want him to stay on it so he is liable for any debts if she can't pay the mortgage? (this wouldn't happen in reality as the bank of mum and dad would ensure her payments were always met). I'm assuming they won't let mum or dad go on the mortgage in place of her partner as we don't qualify for Help To Buy.
Any advice would be much appreciated.
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Comments
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Tricky one. They've both exchanged and a such are both legally bound by the exchange of contracts.
I'd suggest they need to speak to their solicitor about it and see what can be doneI am a mortgage adviser.You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Mortgage_Mark wrote: »Tricky one. They've both exchanged and a such are both legally bound by the exchange of contracts.
I'd suggest they need to speak to their solicitor about it and see what can be done
Would this be the conveyancing solicitor? I was thinking about contacting Nationwide in the first instance to see what their views are before getting a solicitor involved.0 -
I think first and foremost you should see from the conveyancing solicitor whether there's any scope to back out. Probably not, but you never know.I am a mortgage adviser.You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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Mortgage_Mark wrote: »I think first and foremost you should see from the conveyancing solicitor whether there's any scope to back out. Probably not, but you never know.
She doesn't want to back out, but like you say it is too late for that. She wants the house, he doesn't. This has been agreed verbally and needs to be put in writing. I was going to contact Nationwide with my daughter and see what they were prepared to do to sort the problem. We really don't want to sell the house, we just want him off the mortgage and paid off so she can move forward with her life. I was then going to contact a solicitor to draw up a legally binding agreement.0 -
Realistically she is not going to get a £100k+ mortgage on £19k, so I think you need to knock that on the head.
There may be lenders who will do guarantor mortgages but nationwide is not one of them as far as im aware.
As above, your daughter needs to speak to the conveyancing solicitor, this is where if they invested in a good firm (rather than cheap and cheerful) you will potentially see a difference.
Where did the deposit come from?I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Realistically she is not going to get a £100k+ mortgage on £19k, so I think you need to knock that on the head.
There may be lenders who will do guarantor mortgages but nationwide is not one of them as far as im aware.
As above, your daughter needs to speak to the conveyancing solicitor, this is where if they invested in a good firm (rather than cheap and cheerful) you will potentially see a difference.
Where did the deposit come from?
It was a joint effort between her and her partner a total of £15,000. We gifted her £4500 and signed an agreement stating we had no further claim on the money.0 -
mickflynn39 wrote: »It was a joint effort between her and her partner a total of £15,000. We gifted her £4500 and signed an agreement stating we had no further claim on the money.
So is the ex-partner seeking to take any of that deposit for himself, seeing as he saved for it? It could leave her short on the deposit (mortgage situation notwithstanding).:heartpuls Mrs Marleyboy :heartpuls
MSE: many of the benefits of a helpful family, without disadvantages like having to compete for the tv remote
Proud Parents to an Aut-some son 0 -
Tigsteroonie wrote: »So is the ex-partner seeking to take any of that deposit for himself, seeing as he saved for it? It could leave her short on the deposit (mortgage situation notwithstanding).
He wants his money back. £7500. He also wants money back for all the furniture bought for the property. We are looking to reimburse him around £10,000 (from the bank of mum and dad).0 -
Ask Nationwide about their Equity Share scheme see here:
http://www.nationwide-intermediary.co.uk/lendingcriteria/schemes/equity_share_schemes0 -
mickflynn39 wrote: »He wants his money back. £7500. He also wants money back for all the furniture bought for the property. We are looking to reimburse him around £10,000 (from the bank of mum and dad).
Your daughter is fortunate, I hope she appreciates you :heartpuls Mrs Marleyboy :heartpuls
MSE: many of the benefits of a helpful family, without disadvantages like having to compete for the tv remote Proud Parents to an Aut-some son 0
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