Concessions Mortgage

SteveSleigh

Hi

Had an appointment with Barclays today and left totally disappointed.
My situation is my parents want to sell me and my partner a house for £50k, the property is valued in excess of £200k.
Great, should be easy I thought, but no. I have a good credit rating A1 but between us we have nearly £18k on two credit cards.
My initial thought was I would like to borrow £68k enough to pay them off and my parents.
Been told you can not borrow more than the purchase price (even though the LTV is less than 40%) and also I will still require a deposit.
When affordablity was put through (partners and my salary are not particularly high and including the credit cards) the answer was no.

Although we take home around £1800/£1900 and a potential mortgage would be £300/£400 it was considered risky!

Been told by a friend that Halifax are just the same too.
Any help would be appreciated.
Thank you

Thrugelmir

SteveSleigh wrote: »

Although we take home around £1800/£1900 and a potential mortgage would be £300/£400 it was considered risky!

That's not the concern. How you manage your finances is. £18k of debt on your joint annual incomes is significant.

SteveSleigh

Ahh I see, so even though I use them and pay them it’s still considered significant. Makes sense.

ACG

Barclays and a few other lenders have a Debt to income calculation - if it is above a certain percentage of your income (anywhere from around 30-50%) it is an outright decline.

Speak to a broker or try another lender and you should be fine.

One thing to bare in mind is your parents age and whether they are likely to need care - it could be seen as disposing of assets and in turn could come back to bite. It is not a problem doing what you are doing in principle, but if it happens at a "convenient" time or for the reason of avoiding care fees then it is just worth thinking about.

SteveSleigh

Thanks for the reply. I will try a mortgage broker.
My parents live in Spain, own a property out there. I hear they have to live at least 7 years from the point of sale? Otherwise it will be classed as an asset. But I will look into that more.

Edi81

7 years relates to inheritance tax.
Look up deprivation of assets.