Complex Mortgage/Loan Situation

sparkles88_2

Can anyone help or recommend a Financial Advisor who could help with a complex problem? I’m trying to mortgage my house. The following factors are causing the complications:

* The house is Shared Ownership (Scotland) 
* I have poor credit
* The mortgage is required to pay off a loan taken out to buy my current property. This loan is in another family members name as my poor credit didn’t allow me to raise the funds, although I pay it. 

* The house is in my name but appears mortgage free

* The existing loan ends in July and can’t be extended for various reasons so I’m
in urgent need of a solution. 

I’ve been to a mortgage broker who determined this had to be considered a consolidation loan. I’ve spoken to loan companies who tell me it has to be a mortgage! I can’t find anyone who can offer me any finance with all of the above taken into account. 

Really hoping someone might be able to help on here? 🙏 

getmore4less

if you could not qualify for a mortgage when you bought the place,
what has changed that means you can qualify now?
That information would be very useful.
Is your relative declaring the income from you(Interest on the loan they gave you) and paying the relevant tax?
Any mortgage application will need to declare it is to pay off a loan to buy the house in the first place(consolidation)
I suspect first mortgage on existing unencumbered shared ownership will limit your  choice of lenders(A lot), mortgage brokers will be able to confirm and give a clue how many there might be.

getmore4less

Another thing that is important as it decide some legals
What were the terms of the loan from the relative?
Did put those in writing?

davidmcn

getmore4less said:
Is your relative declaring the income from you(Interest on the loan they gave you) and paying the relevant tax?

I presume the OP means the relative has borrowed from a commercial lender and the OP is reimbursing them for the repayments - in which case there are no tax implications.

getmore4less

davidmcn said:

getmore4less said:
Is your relative declaring the income from you(Interest on the loan they gave you) and paying the relevant tax?

I presume the OP means the relative has borrowed from a commercial lender and the OP is reimbursing them for the repayments - in which case there are no tax implications.

The relative cannot offset their commercial interest costs on the interest they receive from the money they loaned to the OP
They should be declaring it as income.

[Deleted User]

getmore4less said:

davidmcn said:

getmore4less said:
Is your relative declaring the income from you(Interest on the loan they gave you) and paying the relevant tax?

I presume the OP means the relative has borrowed from a commercial lender and the OP is reimbursing them for the repayments - in which case there are no tax implications.

The relative cannot offset their commercial interest costs on the interest they receive from the money they loaned to the OP
They should be declaring it as income.

The OP asked about his mortgage possibilities, not his family members tax issues

[Deleted User]

I don't do a lot of shared ownership so am not sure if you can remortgage for debt consolidation. 

@haras_n0sirrah is a specialist in this area though so might be able to help

davidmcn

getmore4less said:

davidmcn said:

getmore4less said:
Is your relative declaring the income from you(Interest on the loan they gave you) and paying the relevant tax?

I presume the OP means the relative has borrowed from a commercial lender and the OP is reimbursing them for the repayments - in which case there are no tax implications.

The relative cannot offset their commercial interest costs on the interest they receive from the money they loaned to the OP
They should be declaring it as income.

I meant "commercial" as in the relative has borrowed from a lender whose business is lending i.e. a bank, not that this is related to a business run by the relative. There is no tax relevance.

haras_n0sirrah

Thanks Deleted_User
First thing you need to do op is to check if the housing association if they will allow you to remortgage for debt consolidation as a lot of them won't. That will be the first hurdle

sparkles88_2

Thanks everyone. Glad some are able to help. 

Just to confirm it is correct that my relative borrowed from a lender and I am making payments to them which go directly to that debt. 

There are no Housing association issues with remortgaging or consolidating. 

It has been 10 years since the initial mortgage attempts. The credit history has improved in that time but is still not great. Appreciate your input everyone! 

MovingForwards

@sparkles88_2 what is showing on your credit history? Ignore the score / rating but the actual history. Late payments? Missed payments? Defaults? CCJ? IVA? Bankruptcy?

After 10 years there must have been some changes, unless you are repeating whatever history you've previously done.