Second charges - query on lenders

jakesuk

Hi all

Mortgage newbie here. First time buyer.

I'm acquiring a property. The plan is for the purchase to be funded as follows:
Cash deposit (personal savings): 20%
Loan from family member to me: 60%
Mortgage: 20%

The loan from a family member will have a second charge over the property.

I understand First Direct will not provide mortgages if another lender has a charge over the property, even if they have the primary charge.

Does anyone know any lenders that definitely will or will not allow a second charge over a property?

Thanks in advance.

foxy-stoat

Speak to a broker - they will be best placed to find a lender....can your family member not lend you the other 20%?

amnblog

It's not a big list.

Use a Broker.

jakesuk

foxy-stoat wrote: »

Speak to a broker - they will be best placed to find a lender....can your family member not lend you the other 20%?

Thanks for responding but other than the issue of the 2nd charge restricting the available lenders, I don't see a need to use a broker. I don't require advice. The mortgage loan to value will be small so I should be able to secure a mortgage.

Therefore, I'm keen to find out who will accept. I've spoken to a couple of banks and the call centre advisors don't seem too clued up.

Family member could just lend the 20% but it is agreed that it will have a charge, even though the loan may ultimately be waived. It is the preferred route.

jakesuk

amnblog wrote: »

It's not a big list.

It won't take you too long to name them then

Thrugelmir

jakesuk wrote: »

The mortgage loan to value will be small so I should be able to secure a mortgage.

The issue for lenders is that the money provided by a family member is a loan not a gift. For some lenders it will simply add a layer of risk that isn't worth the trouble. More so given the small mortgage you require.

ACG

Your going to struggle with this.
It can be done, but it will not be easy.

I realise this probably will come across biased but hey ho. You do not see the need in a broker, yet the banks own staff are not very clued up and you can not find a single lender.... To me, that screams get a broker.

We (brokers) are not allowed to name lenders even if we wanted to. It could be seen as leading and we risk losing our license by doing so.

jakesuk

ACG wrote: »

Your going to struggle with this.
It can be done, but it will not be easy.

Well that is reassuring. The family member does not expect for me to ever repay the loan. It's essentially an inheritance. However, it is more my preference than his that it is structured broadly commercially and hence why a loan was preferred.

I don't want to make the mortgage process unnecessarily complicated and I certainly don't want to penalise myself by getting a worse mortgage deal because lenders may view me as more risky.

Am I likely to end up with a worse deal in your opinion?

ACG wrote: »

I realise this probably will come across biased but hey ho. You do not see the need in a broker, yet the banks own staff are not very clued up and you can not find a single lender.... To me, that screams get a broker.

You raise a valid point but I'm sure you can also see it from my point of view. I am experienced in financial product applications (although never applied for a mortgage). However I am 51/49 in favour of using a broker due to my unusual second charge request....

jakesuk

foxy-stoat wrote: »

Speak to a broker - they will be best placed to find a lender....can your family member not lend you the other 20%?

Yes they could and have offered. I want a mortgage because I think I should have that normality / responsibility.. I don't want a free ride albeit I am fortunate to have any degree of support.

ACG

I do not really know what financial product applications means.

However, I am a Mortgage broker. I make applications most weeks of the year and deal with lenders pretty much every day of the year. I have worked for 2 banks and 2 mortgage brokers before setting up on my own 3 years ago. I turn away certain types of business (shared ownership, commercial mortgages being good examples) because I would not bring anything to the party. I do not get enough enquiries for them, so I have never bothered to learn. There is no shame in knowing your limits.

I will be really honest with you, I can only think of one lender who would potentially do this. Its a high street lender, but a high street lender I have never used before.

Rate wise I personally think you should be there or there abouts. I do not think you would be paying extortionate rates.