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Purchasing a property with a relative
Comments
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The property he is looking to buy is £200k and lenders are willing to borrow him only £120k. He will be putting down a deposit of 25% including the extra SDLT charge, however there is still a shortfall of £30k. If i put my name on the mortgage then he can purchase. On his salary he can afford to make the monthly payments esp if he gets the mortgage for 30years as the payments will be lower. It's just a case of being able to get a mortgage in the first place! Lenders may not think he can afford it but I know he can (his parents will be moving in with him so if need be will contribute to the payments).AdrianC said:
But why?Lover_of_Lycra said:
The OP says the nephew is unable to get a mortgage on his own.gettingtheresometime said:Stupid question but if he can afford the mortgage without you contributing why can't he just get the mortgage in his own name?
The lenders don't agree he "can afford it"?
No equity?
Unacceptable credit history?
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sounds like you are becoming a guarantor, what happens if he cannot make the payments for whatever reason?Rubi87 said:
The property he is looking to buy is £200k and lenders are willing to borrow him only £120k. He will be putting down a deposit of 25% including the extra SDLT charge, however there is still a shortfall of £30k. If i put my name on the mortgage then he can purchase. On his salary he can afford to make the monthly payments esp if he gets the mortgage for 30years as the payments will be lower. It's just a case of being able to get a mortgage in the first place! Lenders may not think he can afford it but I know he can (his parents will be moving in with him so if need be will contribute to the payments).AdrianC said:
But why?Lover_of_Lycra said:
The OP says the nephew is unable to get a mortgage on his own.gettingtheresometime said:Stupid question but if he can afford the mortgage without you contributing why can't he just get the mortgage in his own name?
The lenders don't agree he "can afford it"?
No equity?
Unacceptable credit history?
30 years is a long time after all. Sounds like you will be liable for mortgage payments for that property. Shouldn't you talk to a solicitor so you get a real view of what you are about to do?0 -
I am happy to make the payments if he cannot and have been in touch with a solicitor. I was just initially enquiring whether the purchase of the property without me residing in it was 'illegal' as it was being purchased as a residential property. The idea is once my nephew does his pre-reg and is on a higher salary, i will take out my name as he will be able to get the mortgage on his own. We're talking about 2 years top.eidand said:
sounds like you are becoming a guarantor, what happens if he cannot make the payments for whatever reason?Rubi87 said:
The property he is looking to buy is £200k and lenders are willing to borrow him only £120k. He will be putting down a deposit of 25% including the extra SDLT charge, however there is still a shortfall of £30k. If i put my name on the mortgage then he can purchase. On his salary he can afford to make the monthly payments esp if he gets the mortgage for 30years as the payments will be lower. It's just a case of being able to get a mortgage in the first place! Lenders may not think he can afford it but I know he can (his parents will be moving in with him so if need be will contribute to the payments).AdrianC said:
But why?Lover_of_Lycra said:
The OP says the nephew is unable to get a mortgage on his own.gettingtheresometime said:Stupid question but if he can afford the mortgage without you contributing why can't he just get the mortgage in his own name?
The lenders don't agree he "can afford it"?
No equity?
Unacceptable credit history?
30 years is a long time after all. Sounds like you will be liable for mortgage payments for that property. Shouldn't you talk to a solicitor so you get a real view of what you are about to do?0 -
So, yes, the lenders don't agree that he "can afford" a £150k mortgage, even at 75% LtV.Rubi87 said:
The property he is looking to buy is £200k and lenders are willing to borrow him only £120k. He will be putting down a deposit of 25% including the extra SDLT charge, however there is still a shortfall of £30k. If i put my name on the mortgage then he can purchase. On his salary he can afford to make the monthly payments esp if he gets the mortgage for 30years as the payments will be lower. It's just a case of being able to get a mortgage in the first place! Lenders may not think he can afford it but I know he can (his parents will be moving in with him so if need be will contribute to the payments).AdrianC said:
But why?Lover_of_Lycra said:
The OP says the nephew is unable to get a mortgage on his own.gettingtheresometime said:Stupid question but if he can afford the mortgage without you contributing why can't he just get the mortgage in his own name?
The lenders don't agree he "can afford it"?
No equity?
Unacceptable credit history?
There's a reason for the strength of the affordability checks... the potential for future interest rate rises!
0
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