Charge on property and mortgage application

bell2020

Deleted_User said:

Its not 100% clear on criteria but on Inter Family Transactions it states:  Where purchasing from a family member, they may not continue to reside in the property and must relinquish all rights to the property

The 'relinquish all rights to the property' would imply that they couldnt have a retained interest with a 2nd charge.   I dont do a lot with Vida though.  I might see if i can summon @ACG as its a lender much more in his area of expertise. 

I also found a note stating 'Vida Homeloans will not consider applications where there will be a simultaneous completion of a second charge' so i think it will cause problems.   Maybe another broker can give other ideas but it might be a case of looking at lenders again if father in law is being funny about this.  

I assume that going to Vida wasnt your first choice of lenders.  Do you have a broker leading you with this?   There may still be lenders to choose from.  More and more lenders are returning compared to when you first did your application 

Thank you for looking into it, much appreciated.

Vida is our only option unless Bluestone start lending on Newbuilds again. We have a "complex" case.... active DMP, newbuild and what was a gifted equity!! We are at offer stage now with underwriting and valuation complete... we have been waiting weeks and weeks 😭 but I dont see what other option we have.

Thanks again

bell2020

Sorry forgot to say that yes we do have a broker.... and have used Complete FS the packager!

[Deleted User]

ask your broker to call MBS Lending on Monday.   They do concessionary purchase,   new build,  allow a 2nd charge to be registered, and take people on a current DMP.   Rates arent brilliant but might be the only way out of the situation you have been put in.   They might not take the case with everything together but they seem to do it all individually so its worth a call.   

bell2020

Thrugelmir said:

Sounds as if you need to compromise. As you are effectively gaining £100k for nothing. How much has your relative actually earnt for doing the build ? 

He came to us and said he would build it for what it cost him. My husband (his son) worked on it evenings and weekends for a year.. with no wage! My Grandad painted the whole house.. with no wage! We have paid cash bills, over 7k worth! 

He hasn't earned a wage himself throughout the process but he offered to do this to "set us up for life" ... we have lived in a caravan for nearly 2 years with young children, so we could save money and help pay for things. 

He orignally said he wasn't charging for the price of the plot.. so that's not included in the 165k.... and if we sell it then he would want the 45k plot money back. Which is fine! But now he wants an extra 100k too! Thats not an issue though really.. the issue is whether the lender will accept this factor or whether they will pull out and we won't be able to buy the house at all. Vida is our only option, if they say no then we have no house!

Thrugelmir

The £45k for the plot must be included in the £265k though. Not in addition too. 

bell2020

Deleted_User said:

ask your broker to call MBS Lending on Monday.   They do concessionary purchase,   new build,  allow a 2nd charge to be registered, and take people on a current DMP.   Rates arent brilliant but might be the only way out of the situation you have been put in.   They might not take the case with everything together but they seem to do it all individually so its worth a call.   

Thank you. Yes I've heard of them, they were one of the ones contacted at the beginning but weren't an option at the time, can't remember why. Vida was the only lender who's criteria we fully met. Now it looks like we may have to find a plan B... which is going to set us back even further! And we will of lost the £540 we paid to Vida! Argh, frustrating!

Thank you for your time & advice!

bell2020

Thrugelmir said:

The £45k for the plot must be included in the £265k though. Not in addition too. 

Yes, but to "pay him back" it would be £145k 🙄 he has only mentioned having the 100k written with solicitors though 🤷‍♀️ I don't know, its so confusing and I've never even heard of a charge on a property before. 

It seemed so simple - him build the house.. then sell it to us for what it cost him = £165k! Then use the value of the house as the purchase price meaning we don't need to fund a deposit ourselves. But its literally gone pear shaped and I can't see a way out now!!