100% Mortgage

daveneil

Hi Dave here , i currently rent a house out to my daughter and her partner .
i would like to sell them the house at a very much reduced price. firstly will they get a 100% mortgage and also i believe the £150000 price is out of there price range is there anything i can do to make it happen. the house is worth approx £190000, i just want to help them but i need the £150000 min
thanks in anticipation
Dave:beer:

Ian_Griffiths_Halifax

Dave, do you have a mortgage against the property already?

withabix

No lenders currently offer a 100% mortgage.

If they can't afford £150000, then you aren't really going to be able to sell it to them.

You could re-mortgage it yourself and carry on renting it to them.

You could possibly be guarantor for the mortgage, but if they can't afford it, they will just get into arrears and you will end up being chased for the money.

Ian_Griffiths_Halifax

withabix wrote: »

No lenders currently offer a 100% mortgage.

If they can't afford £150000, then you aren't really going to be able to sell it to them.

Yes they do but it may not be necessary.

daveneil

Hi there thanks for the quick replys , yes i have a mortgage of approx £50000 over twelve years

MortgageMamma

There are lenders who will allow family purchases (family gifted equity) without a cash deposit from the buyers. they will insist you take independent legal advice on the issue and sign a document to say you are doing it of your own free will and not under duress.

You need professional advice. Contact a whole of market broker and discuss your options.

Ian_Griffiths_Halifax

As MortgageMamma has said above, Family Gifted Deposit is the way I'd go. That was the lender would use the full value of the property versus the mortgage amount, to determine the Loan to Value Ratio rather than using a £150,000 purchase and £150000 mortgage scenario meaning they would need a 100% mortgage.

You say you need the £150,000 minimum. Why is this? Is it to pay off other debt? To buy somewhere else? Just because you feel it is only fair?

It may be possible for you to go onto the mortgage with them and set the Deeds up on a Tenancy in Common basis, whereby you would all have an identifiable %age of the property share. That way you could keep 47% (£90000 current value) your self and set them up with 1% to daughters partner (in case they split up) and 52% to your daughter. That way you would get £100,000 now and still retain partial ownership while having minimal risk or payout tot he partner if they split up. If you just give it to them, then they could split up in 6 months and you've lost the money you've effectively gifted to them.

Hope this makes sense, but you need to take advice and I don't really think a forum could do enough for you.

daveneil

Hi again thanks for all the advice , i need some money to pay off my mortgage and the rest can be done in the best way possible for all of us , so i would have to pay lets say £50000 for my mortgage and a nice hol

MortgageMamma

Dave, you need to speak to a broker as there are only a handful of lenders who will enter into these kinds of transactions and it all has to stack up and look right on paper. There are loads of brokers in Lancashire but let me give you tips on how to find a good one.

1, ask family, friends and colleagues for a recommendation of someone they have had satifactory service from
2, if this doesnt work, call a few from the local directory for an informal telephone chat, see who you get a good feel for
3, make sure the broker is searching all of the market, including the direct to lender deals which dont pay the broker commission
4, decide whether you are happy to pay a fee or if you want a limited amount of products considered on a commission only basis
5, make sure you attend the meeting with the broker alone, and then have a follow up meeting with your daughter/her partner.

Good luck and enjoy your holiday

MM

Ian_Griffiths_Halifax

Then I'd say you should look at how much they would be able to borrow on their incomes and assuming you mean £50,000 to pay off the mortgage on the house they are buying off you, plus £50,000 to pay off your mortgage on your house, plus any extra you want/need for now, and if this is ok within their borrowing ability and keeps it affordable, then you could always ask for the difference when their incomes go up in the future or if they sell.

If you would be paying off the mortgage on your house too, then going on the new mortgage with them shouldn't be a problem. It's all down to income and affordability.

Tozer

Isn't the simplest way to actually take a charge over the property yourself? So in effect you would be lending them the delta between what the bank can and will lend and what the property is worth. You will need a deed of priorities so that your charge (mortgage) is secondary to their mortgage. However, these are simple documents and in my experience most lenders don't object to lower ranked charges.

Obviously, the repayment terms of your loan is between you and them.