Desperate Mortgage Advice Needed

Haydn_26

Hi everyone, signed up for a bit of advice before we see the mortgage advisor next week. Here goes.. I'm 23 and currently rent from a housing association, I earn £21,600 a year , full time permanent employee. My salary will be rising to 23k June. My parents recently split, my dad has moved out the family home and now wants to sell. He has offered to sell me the house for £100k, the home is worth £50k. From what I've seen and heard banks such as nationwide would treat this as a gift of equity, no deposit from myself would be needed. Here's the tricky part.... I currently owe around £13k in HP and bank loan, I've never missed a payment and my credit score is above average. Now with these debts the bank will lend me 80k approx which isn't enough. Without the debts nationwide could lend me £115k. Now my dad has suggested that I could possibly consolidate the debt into my mortgage, I can comfortably pay £450-£550 per month repayments OR my dad gets a bank loan and pays my debt off before we apply and I apply for the mortgage of £115k and pay him back with the 15k left over 115k minus 100k mortgage + fees. Its also worth noting my entire annual income is approx 24,500 WITH benefits included. Any idea if this is even possible?

19lottie82

Why would you pay £100k for a house worth £50k? I take it you mean it the other way arounD?

As far as I know you'll still need a deposit (and £ for legal fees)

a bank will still give you a mortgage with debt, but it will reduce the amount they will be willing to lend you.

Haydn_26

The home is worth £150 . Typo

Haydn_26

Whoops, the home is values at approx £150,000. I have no deposit as this was quite unexpected but our financial advisor told us on the phone that the difference between the valued price and sale price would count as a gifted equity deposit.

19lottie82

Ah ok.

i assumed you would need a deposit but if a FA has told you otherwise then I guess he knows best. Remember the legal fees tho.

Not sure if a lender would give you £100k on a 21.5k salary with 13k debt (your potential pay rise is Irelevant until t actually happens). Best see a mortgage broker and see what they say?

Haydn_26

That's the stumbling block. I've tried the online mortgage affordability calculators with and without the debts added. With debts they could lend 80-85k and without they could lend me 110-118k. We were hoping that we could either A- Consolidate the debts into the mortgage or B- My dad would pay them off before applying, I would take out the mortgage for £115k, buy the home for £100k and pay my dad back with left overs. :beer:

marksoton

Haydn_26 wrote: »

Hi everyone, signed up for a bit of advice before we see the mortgage advisor next week. Here goes.. I'm 23 and currently rent from a housing association, I earn £21,600 a year , full time permanent employee. My salary will be rising to 23k June. My parents recently split, my dad has moved out the family home and now wants to sell. He has offered to sell me the house for £100k, the home is worth £50k. From what I've seen and heard banks such as nationwide would treat this as a gift of equity, no deposit from myself would be needed. Here's the tricky part.... I currently owe around £13k in HP and bank loan, I've never missed a payment and my credit score is above average. Now with these debts the bank will lend me 80k approx which isn't enough. Without the debts nationwide could lend me £115k. Now my dad has suggested that I could possibly consolidate the debt into my mortgage, I can comfortably pay £450-£550 per month repayments OR my dad gets a bank loan and pays my debt off before we apply and I apply for the mortgage of £115k and pay him back with the 15k left over 115k minus 100k mortgage + fees. Its also worth noting my entire annual income is approx 24,500 WITH benefits included. Any idea if this is even possible?

I can't see it happening tbh. So many complications.

But if there are options you'll need a very good independent broker.

marksoton

Haydn_26 wrote: »

Whoops, the home is values at approx £150,000. I have no deposit as this was quite unexpected but our financial advisor told us on the phone that the difference between the valued price and sale price would count as a gifted equity deposit.

Maybe it is. But you wouldn't be able to pay it back. If you did it's not a gift and would constitute mortgage fraud.

Haydn_26

If the house is valued at £150,000 and my dad agrees to sell the house undervalue at £100,000 could we not reasonably request to borrow £115,000? Not even for extension work etc? Have I wrongly assumed that the bank would look favourably on this as the house is worth alot more than they have lent?

marksoton

Haydn_26 wrote: »

If the house is valued at £150,000 and my dad agrees to sell the house undervalue at £100,000 could we not reasonably request to borrow £115,000? Not even for extension work etc? Have I wrongly assumed that the bank would look favourably on this as the house is worth alot more than they have lent?

You're trying to be clever and underwriters are not idiots.

And that's before the elephant in the room that is your debt.

Why the obsession to buy this property? It sounds inappropriate for your needs.

I have no idea,maybe you have options. But only with a decent broker who's appraised of ALL your circumstances.

patanne

Where does your mother stand in all this? Surely she is entitled to 50% of the house.