Best options for second mortgage or first time buyer mortgage

Canoe18

My partner and I are looking into buying a house together. I am a first time buyer and have a help to buy isa but my partner has a property that he currently lets. We rent a house together and have done for the last 7 years.
We are unable to sell his property as there are insurance claims that are unresolved with the development of apartments but we successfully let it out. We do this ourselves and do not employ an agent. His mortgage provider allow this for a small fee.

We have both had debts in the past and have worked hard to pay these off. His are totally paid off and I currently have a loan that costs me £200 per month.

Our problem is lack of deposit. We are now saving although only have around £4000 at present. My partner earns £43k and I earn £35k.

I know there are no easy answers but I am considering out options. Are we better applying for a joint mortgage or would it be better to get a mortgage in my name? I'm not sure whether I would get one on my income alone. Obviously we haven't got enough deposit yet. Houses that we are looking at would cost us around £180k.
If I was to apply by myself I assume I could take advantage of a help to buy 95% mortgage.
Another issue is that we need a new car. If my partner was to take out a small loan for that purpose that will affect his options for affordability for a mortgage.
Thanks in advance for any advice. I'll keep on saving as much as possible for now.

alex_163163

I'm not a professional in this area but there are a couple of things to consider from both sides that I have become aware of:


1. If you buy together but don't sell his existing property then I believe you will have to pay the higher rate of Stamp Duty of 3% on your joint purchase. Can you afford this on top of deposit and solicitors costs etc?
If you buy in your name only then you would pay the normal stamp duty.


2. If you do decide to buy together I think there are lenders out there who will lend on 95% mortgages, that aren't HTB affiliated. The presence of these in the market place was the reason the Government ended the HTB Mortgage Guarentee scheme. So I think you could both apply for a 95% mortgage together (someone more knowledgeable please correct me if wrong?)


3. If you want a new build then you could potentially use the HTB Equity scheme where you could take advantage of up to 20% 'loan', meaning your mortgage LTV would be lower (75%) so you get a potentially more favourable interest rate, over a 95% mortgage.


Also, as you are doing, just keep saving as much as you can. Every little helps! If you can save enough to drop you to a lower LTV band then of 90%, then the interest rate will be lower so monthly repayments will be less.