Staircasing help! Smart ideas needed...

D_B

Hello everyone, will explain the situation and would be very grateful if anyone had any bright ideas. We "own" 80% of our property and would really like to buy the remaining 20%. Having recently staircased up to 80% I think that we are at the limit of our borrowing with the bank (as they wouldn't let us go up to 85% 90% etc) Assuming house value of 390k, salary of 50k, 4.5 x our salary is 225k plus 87k deposit/equity came to 312k for the 80%. We need 78k to buy the remaining 20%. We can afford the £300-£400 pcm repayments on the extra 78k but cannot get a mortgage. Do we just have to wait till we have enough savings/change in salary to buy the 20% or is there anything I haven't thought of. I was thinking perhaps adding mum/dad to the 20% mortgage so we could afford it but wasn't sure if that's allowed.

foxy-stoat

I would save the £400 every month - wait until you have built up enough savings and equity then remortgage.

Not sure what you will gain by adding your parents to the mortgage apart from maybe adding additional fees and complications to your situation.

D_B

Thanks for getting back Foxy, I meant to buy the 20% remaining share with my parents so their income would be included when the bank decides whether to give the mortgage or not. 4.5 times my salary is not enough but if I include a parent it would be and then I could make the mortgage payments. I'm not sure if it's possible to just add someone to the 20% staircase part of the mortgage application or if there was anything else I could do. Looks like it will just have to be saving up like you said

foxy-stoat

Depends on the age/salary of the parent I suppose, they may have to pay additional stamp duty, other complications when you sell, they may need to pay CGT, if they need care in the future.  Lots to think about aside from using them for their numbers.

If you can save £4800 a year and pay down the capital in your mortgage you will see in a few years you may be able to staircase on your own.  How much will you pay down in 5 years say, you should be able to save £24,000 cash by then.