Can I get another mortgage?

Swampy3k

Hello there fellow MSE'ers! I am looking for some advice some someone with hopefully considerably more knowledge than myself. (I'll explain below)


I currently have a mortgage on a property (some 45k remaining from an initial 70k) however, due to a promotion and transfer some 18 months ago. I moved 85 miles away and naturally rented a house where I work just now, Luckily my partner finished university and secured a job in the same area so we have decided to make this area our home. unfortunately.. we are currently renting the current place which was only supposed to be a short term thing however it's been 18 months now and we're hoping to get our own place again.


Again lady luck struck, and my mother. whom was renting from a nasty landlord, asked my intentions for my house I own in my old town and we came to an agreement where by I would rent it out to her for family rates and there is nothing drawn up in contract etc. She currently pays me £320 PCM and my mortgage is £439 (currently locked into a 2yr fix which I can change in Mar as I was intent on overpaying when I locked in)


the problem is. as my partner wants to get a house together with me, I am unsure what I can do regarding getting a joint mortgage with her as I currently have a mortgage in my own name. not to mention I have the debts you will see in my signature below.


I currently make 30k PA and my partner around 24k PA. she also has around 4k of debts.

• As I can see it, either we can go for a joint mortgage, and a mortgage advisor will do some calculation such as remove all debts from annual income then can offer us a mortgage for a lower amount?

or

• Do we save really hard, clear my partners debts and get a mortgage in her sole name?

ideally, I'd like to keep my house and once it's paid off it will be a good revenue return, and the house we buy just now is an 'interim' house until we can both afford what we call the 'family' home in 5-6 years when all debts are gone etc. if in 20 years we own and lease 3-4 properties that would be fine with me, but for now I am focusing on the problem on the door step.


if anyone has any knowledge in this sort of thing any information or advice would be greatly appreciated.

Mortgage_Adviser

As long as the lender feels there is affordability for you to have 2 mortgages on 2 properties this can still be doable.
The fact that your old place is let informally to a family member may be a negative thing as the lender may need to asses affordability of 2 full mortgage payments rather than being able to offset some/all currnet mortgage if you had a proper tenants with a tenancy agreement.
The one positive thing about just your partner buying on her own is that if she is a first time buyer she will get a relief on stamp duty.

ACG

In the main, you are going to be fine with getting a Mortgage in joint names. As the post above says, you are going to have to pay stamp duty - possibly higher rate??? Its far too confusing now.

In general, there are lenders who will deduct the rent received from the Mortgage repayments and just class that as a commitment, so as a general rule of thumb, it will knock around £5-10k off what you could get if you did not have that property.

You could potentially do it solely in your partners name, but the issue there is that you would presumably be contributing to the deposit and so most lenders would need you to also be on the Mortgage.

So you have a bit of a toss up:
- Chuck mum out and sell up (I doubt that is a real option),
- Pay stamp duty but get a higher Mortgage amount,
- Do it solely in partners name but have very limited options (although not necessarily a higher interest rate) and be limited to whatever Mortgage her income alone will support.

Jenniefour

Similar thread from OP.

https://forums.moneysavingexpert.com/discussion/5762217

pinklady21

Is this Scotland? Stamp Duty LBTT rules are different from England - and if your name is on the new property you will not be classed as a first time buyer, and will have to pay the additional 3% second home supplement.
You need to check the rules.

Thrugelmir

Both of you need to address your debts in the short term and improve your overall financial position. Ideally under normal circumstances you'd realise the equity in your existing property and settle your own debts. This obviously isn't an option at the current time. The fact that you are subsidising your old property in cash terms isn't helpful. Does your mother know how much debt you owe?

macman

Do you have permission from your existing lender to rent the property? Your mum may not have a 'written contract', but she most certainly has a valid tenancy agreement from what you have stated, and as such she has some security of tenure.
Lenders are generally very reluctant to agree to letting to family members, for obvious reasons..
You are aware of the potential CGT implications of owning a second home?