House purchase with a little help.

02skn

If we buy a house cash with a little help from our parents.. Is it possible to then mortgage the property when we get in to repay the debt ? The house is 271k and we will have roughly 50k loan from our parents.. How easy will it be to get a mortgage on a fully owned property?

Rambosmum

Yes you can, but is there a reason you can't get a mortgage to begin with instead of the loan from your parents?

And your parents will have to evidence where the funds are from - usually 6 months of bank statements submitted to your solicitor, which may make it harder to buy the house in the first place.

Most mortgage company will only lend you a minimum of 25% of the houses value, so you may need to borrow more than you want to, or shop around a fair bit.

02skn

Thanks for the reply.. The lady who is buying our house has sold hers to a first time buyer who is currently in rented. They told her there was no rush to find a property but 5 weeks on they are now putting some pressure on her to move out. Our current mortgage provider has said it would take 6-8 weeks for the mortgage to process on the new property. We do not have that much time as they want to complete middle of July. Our solicitor said if we pay cash our purchase should complete at the same time as the others. Our issue then is how to pay the parents back. Would it not be classed as a re-mortgage?

Rambosmum

You can only re-mortgage if you already have a mortgage.

If your parents give you the loan would they want a charge putting on the house (to safeguard their money)? This could take a few weeks to organise.

Has your buyers searches come back yet? Or your searches? How about their mortgage? Another 8 weeks from now takes the total time the FTBs have be waiting to 13weeks, one week more than the 12 weeks average.

Get the mortgage application started!

eddddy

02skn wrote: »

Would it not be classed as a re-mortgage?

Yes - it's still called a remortgage, if you already own the property - even if it is unmortgaged. And you typically have to own a property for 6 months before you can remortgage.

Some mortgage products are available to new buyers, but not to remortgagers - so you might have to find a different mortgage product, perhaps from a different lender.

02skn

It won't work like that unfortunately. Her buyers have completed their end and just waiting for her to complete on ours. Survey has been done on ours.. Solicitor said completion can be done in 4 weeks time as long as a mortgage is not required. There must be a way to raise finance once you own your own home.

eddddy

02skn wrote: »

It won't work like that unfortunately. Her buyers have completed their end and just waiting for her to complete on ours. Survey has been done on ours.. Solicitor said completion can be done in 4 weeks time as long as a mortgage is not required. There must be a way to raise finance once you own your own home.

I'm not sure who you're replying to.

But, as I said, once you've owned the property for 6 months, you can apply for a remortgage.

It's called a 'remortgage' even if you own the property outright with no mortgage. (Rambosmum's post was incorrect on that point.)

Rambosmum

02skn wrote: »

It won't work like that unfortunately. Her buyers have completed their end and just waiting for her to complete on ours. Survey has been done on ours.. Solicitor said completion can be done in 4 weeks time as long as a mortgage is not required. There must be a way to raise finance once you own your own home.

Yes, get a mortgage. Speak to a mortgage broker to help arrange it, they'll know the different requirements of each lender (e.g. the 6 months that edddy suggested).

Are your parents prepared to wait that long?

I really wouldn't be letting them push you after only 5 weeks if it is going to leave you in a precarious situation. They are FTB, they are literally the bottom of the pile and their solicitor needs to give their head a wobble.

02skn

Thanks eddddy for the sound advice. Parents are in no rush to reclaim the money, we will just wait 6 months and apply for a mortgage as normal. There seems to be a shortage of information on the lenders sites ref. what we are looking to do. I wonder why?

Mojisola

02skn wrote: »

The lady who is buying our house has sold hers to a first time buyer who is currently in rented.

They told her there was no rush to find a property but 5 weeks on they are now putting some pressure on her to move out.

Rambosmum wrote: »

I really wouldn't be letting them push you after only 5 weeks if it is going to leave you in a precarious situation.

They are FTB, they are literally the bottom of the pile and their solicitor needs to give their head a wobble.

This ^

Your buyer should tell her buyers that it takes time to go through the process of buying a house and they will just have to pay rent for another couple of months.

Why should you all put yourselves in difficult situations because they are in a hurry?

AnotherJoe

What rambosmum said, teh FTBs shoudl be in no position to call the tune, what are they going to go if their vendor says "tough you'll have to wait". It would still take them longer than the 8 weeks to find another house to buy and they will lose the money they've no doubt already spent on searches and legal fees.