100% Family assist mortgage

lindsaygalaxy

Little bit of background - I am an ex bankrupt. 6 years is up satisfied April next year.

A friend is an agent and found a great 3 bed house that needs some work doing to it. The stairs need swapping around as currently against building regs and possible rewiring. Everything structural is sound and mostly cosmetic. The sellers want a quick sale due to the fact of a not so nice ending to the previous resident (no one else involved!) but it's putting a lot of people off. Once done up it will be worth £385-£300k. Would be buying it for around £220 - £230k.

My past is the problem with only Nationwide who may accept us currently at 95%. But they gave me a default for £60 for an unauthorised overdraft. It was a an old joint account with my ex and he set up a dd without my knowledge. When he left I didnt know about it until checking my report.

Anyway, if we could get a 100% mortgage we could use our savings to do the property up rather than further borrowing. His parents are happy to guarentee and they have more than ebough equity in their property to do this (asset not cash rich). Aldermore are not currently an option as they need me to be 6 years satisfied. Are there any other choices? On his own my oh could only get about £180k.

Edi81

100% mortgages don't exist. You'd be doing well to get a 95% mortgage due to previous history.
Have you spoken to a mortgage broker?

lindsaygalaxy

They do exist - Aldermore and Bath both offer them. I can't find the lending criteria for Bath though. The Family Buyilding society do 95% but wont except a past bankrupt.

ACG

I think bath only do it in certain circumstances from memory - something along the lines of if the relative is going to uni maybe? Im not sure but I remember thinking the chances of them ever doing a case that will complete is very remote.

Either way, both lenders have guarantor type mortgages BUT they are there to overcome a shortfall in income, not adverse credit. Those are the only 2 lenders I know of who would do 100% lending on new purchases.

When assessing affordability the parents age will play a part as will their income/expenditure and also the term of the mortgage.

What about getting development finance? It wont be cheap but it wont cost you £100k in equity you will be creating. They would want to secure it against the property and something else but it means no money down, no monthly payments and then once done you will likely be 6 years discharged AND more importantly, you will be remortgaging a property at 60-70% LTV rather than 100%.

lindsaygalaxy

Thank you ACG, we hadn't thought about that and will look into it.

If the guarentees overcome income shortfall could my OH apply on his own? This ofcourse would leave no money to do the work. It is liveable would just make it a very slow process and in some not great conditions (though i've rented worse!)

Thrugelmir

No one discounts a house by a £150k merely for some cosmetic work.

lindsaygalaxy

Its not £150k, its more like £50 - £75k and that is once the work is done. Someone chose to die in their own way there (not one of the nicest ways) and its a small place. Its well known about and putting people off.

ACG

Your partner and his parents may be able to do it.

Personally I think getting this through on a residential is going to be a step too far. Your options are so ltd (2 lenders) and they both have so many hoops to jump though (guarantors fitting, income shortfall, the property would also need to pass a valuation - which it may not and so on).

You then also have to think about this down the line... he purchased the property without you. If you split up, you may not be entitled to any of it.

For me, this would be a bridging loan/development finance all the way.

Thrugelmir

lindsaygalaxy wrote: »

Its not £150k, its more like £50 - £75k and that is once the work is done. Someone chose to die in their own way there (not one of the nicest ways) and its a small place. Its well known about and putting people off.

Did you mistype?

£385-£300k

lindsaygalaxy

My apologies, yes £285 - £300k.

Thrugelmir

lindsaygalaxy wrote: »

My apologies, yes £285 - £300k.

That makes more sense.