First Time Buyer (not quite..) help and advice!

Maxeh

Hello everyone,

I am after a bit of guidance reference getting my first property.

It's not entirely straight forward as although this will be my first house I am currently named on my Sisters mortgage as when she first took her mortgage out it enabled her to get on the ladder.

Whether this was a good move or not at the time is another matter but I am now in a position to move myself.

I am still named on her mortgage but due to her finishing University recently and looking for work, I cannot come off the mortgage due to her income.

She currently doesn't earn enough money to cover her mortgage and is currently relying on help from our Mother (families eh!). I have not once paid into this mortgage I should state as prior to her going to University she has been able to cover the costs with ease.

I am looking at properties in the region of £125k with a £15k deposit currently.

I have been told by a broker and my bank (Santander) that I can borrow up to £140,000.

I suppose my question is, should I wait a bit longer and continue saving until I am off my Sister's mortgage, or go ahead now with my own and come off the first mortgage when possible.

I am pressing her to look for a job with an income that can support this and she is actively doing this so coming off the mortgage and meaning she default's isn't really a road I want to go down.

Bracing myself for the replies!

somethingcorporate

Does the amount you could borrow take into account you are already on and liable for your sister's mortgage - whether or not you contribute to it? effectively this will be funding a second home for you and any affordability calculations will need to take into account you are liable for the other mortgage.

I assume you ignored furnishing the lender with this fact so expect you need to "come off" your sisters mortgage - which is actually your mortgage, before you can buy on your own.

Maxeh

Hi,

Yes it does, they are both of the opinion I will come off the first mortgage shortly but for now they have to take it as potential liability of ~£400 a month.

This gives me a lower borrowing figure but due to the value of the properities I am interested in it doesn't really effect me.

They also mentioned boosting my deposit slightly to get me an LTV of under 90% which won't be an issue.

Maxeh

Well Santander have now told me that I can only borrow £44k due to my Sisters mortgage and bills being a potential monthly commitment.

Pixie5740

Did you apply to Santander directly?

Does your broker have any other lenders in mind?

Let_Us_See

I appreciate what you are trying to achieve but your 'research' leaves a lot to be desired?

You are NOT a first time buyer. It appears you failed to originally disclose your current mortgage commitment to Santander and your broker, and bills are very much an 'actual' commitment.

Very unlikely you will be released from existing mortgage commitment until your sister is either able to service mortgage from own income or you are replaced by a suitable guarantor etc.

getmore4less

If a suitable place you may be better moving into your house and getting her off the mortgage.

csgohan4

This is why family/ friends and money don't mix well. Good intentions perhaps, but it can end up with problems later on. So now who gains the most and who losses the most?


As someone said above, better to get your sister off the mortgage if she can't afford it. Then sell it.

Maxeh

I have told Santander and my broker from the out set my situation so they are under no illusion about my first mortgage, that's not to be confused!

The first mortgage and potential bills were all taken into account when doing our budget planning, fear not.

The broker have spoken to their underwriters and have offered the following:

Option A:

3.38% Fixed rate until 30th September 2017

Survey fee:
£248 for a Basic Mortgage Valuation,

£442 for a Homebuyers Report (Payable on application)

Lender arrangement fee:
£995 (Can be added to the mortgage and the below monthly payments assume this)

Mortgage Integrity admin fee:
£99 (Payable on completion)

Redemption penalty:
2% of loan to be paid until 30/09/2016, Then 1% of loan to be paid until 30/09/2017, 10% capital repayments allowed per year without penalty

Monthly payment:
£461 over 35 years

Option B:

3.73% Fixed rate until 30th September 2018

Survey fee:
£248 for a Basic Mortgage Valuation,

£442 for a Homebuyers Report (Payable on application)

Lender arrangement fee:
£995 (Can be added to the mortgage and the below monthly payments assume this)

Mortgage Integrity admin fee:
£99 (Payable on completion)

Redemption penalty:
3% of loan to be paid until 30/09/2016, Then 2% of loan to be paid until 30/09/2017, Then 1% of loan to be paid until 30/09/2018, 10% capital repayments allowed per year without penalty

Monthly payment:
£484 over 35 years

Option C:

4.19% Fixed rate until 30th September 2020

Survey fee:

£248 for a Basic Mortgage Valuation, £442 for a Homebuyers Report (Payable on application)

Lender arrangement fee:
£995 (Can be added to the mortgage and the below monthly payments assume this)

Mortgage Integrity admin fee:
£99 (Payable on completion)

Redemption penalty:
5% of loan to be paid until 30/09/2016, Then 4% of loan to be paid until 30/09/2017, Then 3% of loan to be paid until 30/09/2018, Then 2% of loan to be paid until 30/09/2019, Then 1% of loan to be paid until 30/09/2020, 10% capital repayments allowed per year without penalty

Monthly payment:
£516 over 35 years

These are all based on my first mortgage staying in place.

I appreciate all the help so far guys.