Buying a property with my dad, FTB

I'm a first time buyer, I've spent about 4 years saving and I have a £40,000 deposit. I earn about £20,000 as a dividend payment.

I went to Santander for an informal mortgage appraisal and surprise, they said that I could only borrow £80k-£90k.

My dad, well parents, are mortgage free. I live with them.

My question is, can my dad and I apply for a mortgage together, to get the income part up in order to be loaned more? I've proved I can save and in years time I'd have saved more, and I can afford the mortgage repayments and utility bills, but it's the income which is the hurdle.

It would increase my mortgage potenial to between £185k-£210k based off of the mortgage calculators I've used from TSB and Halifax (I know they aren't case specific but they are pretty accurate, and what Santander advisor used herself) coupled with my deposit and a Help to Buy Equity Loan of 20%.

Only thing is I've noticed, the only mortgages offered are FTB, Remortaging, Second home mortgage mainly. Obviously I'm a FTB, and I guess my dad would be a second home mortgage. There doesn't seem to be a 'Mortgage' option, if that makes sense.
«1

Replies

  • spadooshspadoosh Forumite
    8.7K Posts
    Ninth Anniversary 1,000 Posts Name Dropper Photogenic
    Forumite
    The problem youve found is much smaller than the real problems.

    First and foremost would be stamp duty, presumably he already owns a home and thus if youre buying a house in that price bracket he (read you) will be subject to stamp duty costs.

    The second is mortgage lenders dont like lending money to someone unless their name is on the deeds. So youre dad is almost certainly going to need to be on the deeds. Whilst not immediately a problem family fall outs can and do make things like this a very big problem at some point.

    What the lender calls a FTB is a lot more variable than the government. So in this instance using FTB mortgage products would be probably the most suitable. I dont know much about the Help to buy equity loans iirc you can still use this you are a FTB but double check just in case owning with your dad would void it with him not being a FTB.
  • JoxJox Forumite
    1.7K Posts
    Part of the Furniture 1,000 Posts Photogenic
    Forumite
    Stamp duty on £210,000 property will be £8,000 if you and your dad buy together and £0 if first time buyers buy it
  • 20SmthngSver20SmthngSver Forumite
    512 Posts
    100 Posts Second Anniversary Name Dropper
    Forumite
    Thanks both for your comments. So buying with my dad with him on the deeds would void off my incentive for no stamp duty as I am FTB but he isn't. I guess it's irrelevant that the property is under £300k.

    Would these drawbacks still apply if I apply solely, but he stands guarantor for me? So the mortgage and deeds are in my name. Or would that not deal with my income x5 for a mortgage issue?
  • spadooshspadoosh Forumite
    8.7K Posts
    Ninth Anniversary 1,000 Posts Name Dropper Photogenic
    Forumite
    Thanks both for your comments. So buying with my dad with him on the deeds would void off my incentive for no stamp duty as I am FTB but he isn't. I guess it's irrelevant that the property is under £300k.

    Would these drawbacks still apply if I apply solely, but he stands guarantor for me? So the mortgage and deeds are in my name. Or would that not deal with my income x5 for a mortgage issue?

    If you apply in your sole name your income multipliers will be based on your sole income so back to square one. Guarantor loans are more for people with a bad credit history than people trying to borrow more than typically allowed.
  • Caz3121Caz3121 Forumite
    15.1K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    Forumite
    have a search for "joint borrower, sole proprietor" products
  • 20SmthngSver20SmthngSver Forumite
    512 Posts
    100 Posts Second Anniversary Name Dropper
    Forumite
    spadoosh wrote: »
    If you apply in your sole name your income multipliers will be based on your sole income so back to square one. Guarantor loans are more for people with a bad credit history than people trying to borrow more than typically allowed.

    I see, thanks.

    That's the issue with me. I have a deposit and I can afford the repayments. It's just the income box they go off. It's almost irrelevant what deposit you have now.
  • 20SmthngSver20SmthngSver Forumite
    512 Posts
    100 Posts Second Anniversary Name Dropper
    Forumite
    Caz3121 wrote: »
    have a search for "joint borrower, sole proprietor" products

    I had a look. Barclays, Metro Bank, Yorkshire Bank and Clydesdale Bank offer these JBSP, and a few small building societies.

    This could really be something. Thanks, never come across it.
  • Edi81Edi81 Forumite
    1.3K Posts
    Eighth Anniversary 1,000 Posts Name Dropper Combo Breaker
    Forumite
    You can afford the payments at current interest rates. What if rates were to increase to 7 or 8%?
  • 20SmthngSver20SmthngSver Forumite
    512 Posts
    100 Posts Second Anniversary Name Dropper
    Forumite
    Edi81 wrote: »
    You can afford the payments at current interest rates. What if rates were to increase to 7 or 8%?

    I can't see rates rising from 1.5% to 8%. Some are already 4% or 5% that I've seen. A few % on a monthly repayment wouldn't be that much. I'd be looking at a 5 or 10 year fix anyway.
  • [Deleted User][Deleted User] Forumite
    0 Posts
    1,000 Posts Third Anniversary Name Dropper
    Newbie
    I can't see rates rising from 1.5% to 8%

    You can't see it (and neither can I at any great speed), but that's what the banks have to stress test your ability to pay against.
This discussion has been closed.
Latest MSE News and Guides

Boost your Nectar points

Get up to £25 in bonus points

MSE News

Ask an Expert: Scams

Watch MSE Katie's answers to your questions

MSE Forum

Hot Diamonds 40% off code

Including already-reduced outlet stock

MSE Deals