Interest only mortage

bauhaus

Hi,

I live with my brother and his family. Their interest only mortgage was taken out 1994, so only a couple of years now before the capital needs paying. The problem is, they don't have the money, which is £50,000 and to make matters worse, they were made bankrupt in 2006, so this would make re-mortgaging difficult.

They might be able to get hold of £25,000 from a family member and if they were, I was considering what I could do to try and get the other £25,000 needed.

I have a very good credit rating so would it be my best approach to go to the bank and ask for a £25,000 loan? How and what would I say it's for? Or is there a better alternative?

Thanks in advance

IAmWales

Only lend money if you're a) able to make the repayments yourself, and b) happy to write off the money.

Lending money is a very bad idea. I'd suggest your family look to sell up, and buy somewhere more affordable or rent.

DCFC79

Agree with the previous advice.

Your credit rating despite being good tells us nothing whzt your credit file is like, lenders see the history and not the score.

bauhaus

Thanks for the reply and I see your point. The whole situation is complex as I myself reside there and the emotional connection to all of this. If I was to get the loan, the repayments I make on this would act as my rent for living there. I'm not sure how to ask and what my chances are of getting this loan from the bank when I explain what it's for.

It's also worth noting that my brother would be willing to put me on the deeds if this would help in securing the loan. I'm pretty much clueless on all of this in regards to how lenders view all of this.

bauhaus

Well, I've currently have a £7000 loan running, a number of credit cards, never missed a payment or been refused anything from a lender in about 10 years.

paddyrg

Don't loan - buy. Buy 50% of the property for £25k - which is the 1994 price, so you'll surely be able to get a loan against it as it'll be worth more now.

bauhaus

@paddyrg - thx for the reply. I should explain a further in regards to the ownership of the property. My brother and his wife own two thirds of the property with the remainder belonging to a trust. A small number of houses were built in the area during the early 90's to help young couples in the area get on the property ladder with village/trust retaining a stake in the property. I had the feeling that there were/are different avenues to explore and your idea has certainly got my attention.

[Deleted User]

If I understand this you have no financial or ownership interest in the property? You just live there? Therefore its NOT your problem, if I were you I'd be looking to move out and rent somewhere for you, or even if possible get a deposit together and buy.

leespot

Being bankrupt in 2006 shouldn't have much of an impact on their current credit rating - unless they have gotten into more debt?

bauhaus

@venison - you're correct. I have no financial or ownership interest in the property, just that I live there and the family connection to it. Naturally, they would rather not have to up sticks and move and neither would I tbh.

bauhaus

@leespot - might be worth a try!! Not massively in debt, a couple of credit cards between them with no big balances outstanding on them. But yeah, they could at least try to re-mortgage first and if that fails the second option could be to sign the house over to me if means securing the money to pay off the capital.