Remortgaging with a (retired) parent?

PacmanGoNomNomz

Hi all,
I'm in a bit of a predicament so looking into what options are available to me. Any opinions and/or advice are, of course, welcome.

The backstory... bought a house with my then-girlfriend in November 2015 on a 95% LTV with a HSBC mortgage. Sadly, we split in February this year. Her income is not sufficient to get a remortgage in her name alone, but my circumstances are a little more favourable. As a result we've agreed that I will attempt to get a remortgage at the end of the 2-year fix (which is the end of October) and if successful, buy her out.
I've spoken to two mortgage advisers and HSBC about what options are available. The sticking point is my earnings relative to amount I have to borrow. I will need to borrow £199,750 against a house valued at £235,000 - which is dead on the 85% LTV. HSBC's lending criteria includes a maximum borrowing multiplier of 4.75 x salary. This means I need a minimum salary of just over £42,000.
My salary at the moment is £39,615, although I've got a promotion in September (confirmed) and is likely to be (not-confirmed) £42,388 (+ small bonus), ignoring the bonus, this would take me just over the salary multiplier requirement.

However, I appreciate other financial factors will contribute to the decision for the remortgage. Thankfully I'm pretty frugal, no outstanding credit balances, loans, car payments etc - but given I'm so close the salary multiplier limit, I'm assuming a mortgage provider would expect me to live with next to zero expenditure (which I obviously do not, but I do save about £500 a month). So I'm looking into options available to me to increase my chances here.

My father (80 years old and mortgage free) has offered to be a joint applicant for the remortgage. The idea being that his retirement income is included in the joint application which would offer a margin over the 4.75x salary multiplier. To all intents and purposes, although he would be legally committed, I would run and own the house as though I were the sole owner.
My concern is how mortgage providers would view an 80 year old effectively taking out a 30 year mortgage (I'm 32) and the issues regarding him being the owner of a now 2nd home.


FYI, I've referred to HSBC throughout as they:

• have the most favourable 85% LTV rates
• their salary multiplier is one of the more generous ones for remortgages in the North East of England.

Thanks for taking the time to read.

Adam

Caz3121

PacmanGoNomNomz wrote: »

My concern is how mortgage providers would view an 80 year old effectively taking out a 30 year mortgage

I can't see any lender looking at a mortgage where it runs till one of the applicants is 110 years old
Although HSBC does not quote a maximum mortgage age, if you are lucky they may allow a 5 year mortgage (if they go with the maximum of other lenders) which will leave a repayment of more than your income so would fail on affordability
http://www.standardlife.co.uk/c1/news-and-blog/mortgage-age-limits-set-to-meet-evolving-wants/

PacmanGoNomNomz

Thanks for the reply.

With that in mind, are there any other options available to me that might help secure a remortgage in my name alone? Or realistically, are my chances pretty slim?

Thrugelmir

Could your father assist you in reducing the required LTV?

Lilla_D

As long as you don't get blinded by the lowest rate and are willing to look at other lenders as well, those brokers you have spoken to should be able to help you. But as per above, you should do it in your name alone, as your father's age is prohibitive for what you'd like.

PacmanGoNomNomz

Thrugelmir wrote: »

Could your father assist you in reducing the required LTV?

Hi there,
It is possible, yes. Honestly, it was something I wanted to avoid but it's increasingly becoming my only chance to keep the house I feel. Thanks for the suggestion.

Lilla_D wrote: »

As long as you don't get blinded by the lowest rate and are willing to look at other lenders as well, those brokers you have spoken to should be able to help you. But as per above, you should do it in your name alone, as your father's age is prohibitive for what you'd like.

Hi, it's a good point. In my head, I was concerned that other lenders with less favourable rates would put pressure on my 'affordability'. Once I've got the payrise confirmed in September I'll start the process in earnest with the brokers.

Thank you for the responses.

Adam

PacmanGoNomNomz

Just wanted to update this thread.

Promotion came through, applied via HSBC, got the mortgage completed in January this year. No difficulties whatsoever.

Thanks to those that responded for your advice.

Cheers.