If I own 4/5% of a house, what is the impact on Mortgage or Help to Buy?

Jeff.Jones78

Pixie5740 wrote: »

This has all been discussed before:

https://forums.moneysavingexpert.com/discussion/5359228

You need to work out if you are gifting your ex money, lending her money and getting a second charge on the property, or jointly owning the property.

I am sorry but the question here has not been discussed.... As per the original question in this thread, I have agreed to own a % of her new house. And was inquiring about the possible impact on me getting my own mortgage.
However, some posters have been informing me that this is unlikely to be accepted by her mortgage company so it is potentially throwing this plan down the drain...

J.

Pixie5740

You're asking what a second charge was and it has already been explained to you when you wanted to lend her money to buy a property.

Now in this thread you want to jointly own a property with her and the only way that will happen is to have a joint mortgage with her giving you joint and several liability for the whole mortgage so no better off that you are now really.

kingstreet

SDLT - second property, so 3% surcharge and no £125k nil rate band.

HTB - prohibited

Mortgage - if you are party to other mortgage, it will affect affordability for a new one.

You need to get proper advice about this before you ruin your future.

Jeff.Jones78

Pixie5740 wrote: »

You're asking what a second charge was and it has already been explained to you when you wanted to lend her money to buy a property.

I had not realized that a charge on the property was the same as a second charge mortgage...

Pixie5740 wrote: »

Now in this thread you want to jointly own a property with her and the only way that will happen is to have a joint mortgage with her giving you joint and several liability for the whole mortgage so no better off that you are now really.

That's what I don't get. If I own 5% out right, then it is not a joint mortgage and I have no liability since my 5% are owned.
Sorry if I am being stupid, but that was my first property purchased 18 months ago and I had never expected to have such a rubbish situation and a separation right now!

Pixie5740

I don't see what you only buying a property 18 months ago has to do with the price of fish. Has this property even been sold or at least put on the market?

You can't just buy 5% of a property when your ex needs a mortgage for the rest. She will struggle to find a lender who will allow this. She will also struggle to find a lender who will allow her to borrow the deposit from you. You're either going to have to gift get the deposit or forget about giving/lending money to her. IIRC you have previously said that she has no income other than what you give her so her chances of getting any mortgage are slim to none.

Jeff.Jones78

Pixie5740 wrote: »

I don't see what you only buying a property 18 months ago has to do with the price of fish. Has this property even been sold or at least put on the market?

You can't just buy 5% of a property when your ex needs a mortgage for the rest. She will struggle to find a lender who will allow this. She will also struggle to find a lender who will allow her to borrow the deposit from you. You're either going to have to gift get the deposit or forget about giving/lending money to her. IIRC you have previously said that she has no income other than what you give her so her chances of getting any mortgage are slim to none.

The property was put on the market a month ago and we had a cash offer within 3 days at full asking price. The ex has now found a new place and an offer accepted on Friday. She is able to get a mortgage of 250k thanks to her part time job, tax credit and my pension... but she short of deposit.

davidmcn

Jeff.Jones78 wrote: »

That's what I don't get. If I own 5% out right, then it is not a joint mortgage and I have no liability since my 5% are owned.

No mortgage lender will accept being able only to repossess 95% of a property. If you jointly own the property then it needs to be a joint mortgage i.e. at the very least you'd need to sign the deed granting a charge over the property, and in practice most lenders would also want you to be jointly and severally liable for the loan.

davidmcn

Jeff.Jones78 wrote: »

If I had a charge over the house, would it create issues with the mortgage company too? (cf marksoton post)

Quite likely as they prefer not to have any other charges over the property, and she may have a fundamental problem if she has to borrow her deposit, as lenders expect that to be the borrower's own funds.

In the case of putting a charge over her house, would I be seen as a home owner?

No, you'd be a secured lender, not an owner.

marksoton

Jeff.Jones78 wrote: »

She is able to get a mortgage of 250k thanks to her part time job, tax credit and my pension... but she short of deposit.

Blimey,that's some achievement!

But the problem remains,she can't get a mortgage as she doesn't have a deposit.

Jeff.Jones78

Celifein wrote: »

Her part-time wage is low enough for her to qualify for tax credits, yet she can get a £250k mortgage? Why are they taking into account your pension income if you're no longer together?

I'm a little jealous. I earn just over the tax credit threshold and I can only get a mortgate about a fifth of the size of that.

Don't get me started with the English system as I'm puzzled by it (I'm French)! She is getting approx 500GBP a month of tax credit as her PT work qualify for it. I should have said maintenance (not pension) for my daughter 700GBP a month. She also gets disability allowance for her first son (again 450GBP or so); all that on top of her salary.
Saying that I just tried some mortgage calculator and I can get up-to 190k but nowhere near 250k. I need to dig further when I drop my daughter tonight as something does not add up