Unusual Mortgage

DMC.

I am currently renting and looking at possibilities to buy. I am unable to get a mortgage as my husband was recently declared bankrupt and I do not earn enough on my own.


My family are desperate to help me buy a property, as we are currently paying £1300 a month in rent.


My parents have suggested they sell their property and we buy a property with an annexe and use this as a deposit and my brother obtain a mortgage.


My brother is on a good salary with a mortgage of £150,000 with excellent credit rating.


We would have approximately £220,000 as a deposit and looking to purchase a property of £450,000.


Is this possible, any suggestions would be welcome.


Many thanks.

kingstreet

Who is going to own this property and who do you think are going to be the borrowers on this mortgage?

DMC.

My brother would own the property and my brother would be taking out the mortgage in his name.


I would be paying the monthly repayments.

kingstreet

So this would be a second property, in which he won't reside, with an existing mortgage on his own home in the background?

He'd need to be able to borrow £380k. Does he earn £84,000+ with no dependents, no credit commitments of his own etc?

DMC.

Yes, that's correct. He has a mortgage of £150,000 on a property valued at approximately £250,000. He owns a 20% share on a property with no mortgage with his ex wife, which he will receive when his daughter reaches 18.


He has no credit commitments other than his mortgage. I am unsure of his income, I think his income is nearer £70,000.

kingstreet

I can't see affordability being met for the £380k borrowing needed if he is earning only £70k. That would be over 5 x his income.

Go and talk over this proposition with an independent mortgage broker. There are all kinds of peripheral issues with this;-

second property
occupants not being party to mortgage and ownership yet contributing deposit
affordability
property with annexe.

It will need careful planning to try to find a way forward.

somethingcorporate

I think you should go and see a broker, they are worth their weight for a complex situation like this.

Edit: Crossed with kingstreet..

DMC.

Unfortunately by brother has been to see two different brokers and both of them were unable to help, as they did not seem to understand anything different to a standard mortgage.

JimmyTheWig

DMC. wrote: »

Unfortunately by brother has been to see two different brokers and both of them were unable to help, as they did not seem to understand anything different to a standard mortgage.

Were they based within estate agents?

DMC.

One definitely was, not sure about the other.

kingstreet

You need an experienced independent mortgage broker for this, not an EA advisor who is already overworked and under pressure trying to meet their targets for everything under the sun they have to sell.

Many EA advisors are also just starting out in the business and haven't yet built up enough experience to be able to cover really tricky non-standard stuff.

Expect to pay a fee for this case. Fee-free, even though the commission will be around £1,200 won't generate much by way of profit as the work needed to place this and get it to offer will be arduous and time-consuming.