Desperate Mortgage Advice Needed

alchemist.1

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?

Not the most honest way but best way would be your dad taking out a loan to pay off your loan.

You cant afford to borrow 100k or 115k as a mortgage from the banks perspective (until the loan is paid off) Extension work or not.

Haydn_26

That's what we were proposing. We are at all times being completely honest with our independent broker and we would discuss this option. Could we not consolidate the debts into the mortgage?

Brown_Eyed_Girl

Haydn_26 wrote: »

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:

I'd not look at the online ones, you need to talk to a mortgage adviser who knows the market and will tell you what you'll get. Online would only do 3-4x my salary, I got 5x for my mortgage. There are lots you can talk to, and have an initial consultation without paying a fee. Some will charge you if you decide to use them, mine was one but was worth it for the amount of chasing he did, others are free but might not show the full market.

Wilma33

Is your mum happy to sell her half at such a massive discount? Where is she going to move to?

Haydn_26

From what I gather my mums share would remain locked into the house until I decided to sell it. So she would be part owner. From what I understand my dad will sell the house for 100k to me , with that he would pay off the mortgage for 60k and keep a share 40k to live elsewhere. He said that we would consult a solicitor to ensure my mum would retain her share of equity if we sold the house at a later date at full market value. Both parties are happy with this.

marksoton

Haydn_26 wrote: »

From what I gather my mums share would remain locked into the house until I decided to sell it. So she would be part owner. From what I understand my dad will sell the house for 100k to me , with that he would pay off the mortgage for 60k and keep a share 40k to live elsewhere. He said that we would consult a solicitor to ensure my mum would retain her share of equity if we sold the house at a later date at full market value. Both parties are happy with this.

This, quite frankly,ain't going to happen.

What a bloody mess of a transaction! Don't even attempt it.

Wilma33

You are making this ridiculously complicated. If your parent's want to sell their house then let them get on with it. You can't afford to buy it.

patanne

You need to see your own solicitor about this. Surely your mother's name should remain on the deeds if she is to retain a share of it? Apart from anything else it needs to be very clear what share she has of the equity. You aren't actually getting £150k of house for £100k. You are (taking into account her current share of the equity) buying only £110k worth. Is she always going to only get £40k of the equity or all the equity above £100k of the sell price or is she going to get all the equity above the mortgage repayment. You do really need to see a solicitor. Initially it sounds like a good idea but it is actually full of holes.

Annisele

Haydn_26 wrote: »

From what I gather my mums share would remain locked into the house until I decided to sell it. So she would be part owner. From what I understand my dad will sell the house for 100k to me , with that he would pay off the mortgage for 60k and keep a share 40k to live elsewhere. He said that we would consult a solicitor to ensure my mum would retain her share of equity if we sold the house at a later date at full market value. Both parties are happy with this.

If your Mum is going to remain part owner, then your Dad can't sell you the whole house. He can only sell you the part of the house he owns. One of the (many!) problems you'll have is that no mortgage lender will lend you money to buy part of a house - a mortgage loan is to buy whole houses.

A joint mortgage with your Mum might be possible, but it sounds like the best option by far is for the house to just be sold to an unrelated party for its market value.

Thrugelmir

Haydn_26 wrote: »

Could we not consolidate the debts into the mortgage?

Lenders may regard this as irresponsible on their part. As there's no guarantee that you won't simply run up debt again. Resolving the matter yourself will make you wiser and more sensible with money in the future.