I want to help my parents buy flat by getting a joint £100k mortgage with Mum (they have £100k deposit). Will I still be able to get my own mortgage?
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272Swarbs postedYou should still be able to get your own mortgage, but being on a joint mortgage with your mum may affect the size of that mortgage. The £100k joint mortgage will show up on your credit report, and some lenders may simply say that that is £100k of debt in your name, and so reduce the size of any mortgage they would lend you by £100k. Indeed, some lenders may refuse to lend to you at all as you already have a residential mortgage. Some lenders may be willing to be more reasonable, and only take £50k off the amount they lend you, and some may be more reasonable still, and not take any money of the amount they lend you, particularly if you provide documents showing that your mum is able to pay the mortgage on that flat on her own.
However, in the current market climate it is very unlikely that any lenders would be that reasonable - they simply won't take the risk when there are so many people looking to take mortgage without any additional commitments like this. Until the mortgage market and the volume of lending fully recovers, being joint on a mortgage with your mum will almost certainly reduce the amount you can borrow by close to £100k, and is also likely to reduce the number of lenders available to you. This is of course contingent on your job and salary - if you are earning £250k a year plus bonuses as the head of a public sector agency most lenders will still clamour to have your business. But if you are like the rest of us, with a normal salary and only a reasonable degree of job security it will put a big red flag above your name for most lenders and dramatically reduce the amount you are able to borrow.
Posted on 13 March 2010 |
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804MikeGG1 posted
I would agree with Swarbs, but have your parents considered whether they could raise the mortgage themselves based on their incomes? Interest rates on a 50% mortgage are quite low at the moment.
That wouldn't then count against your own mortgage limit, even if you help them with the payments for the time being.
Mike
Posted on 14 March 2010 | Love 0 loves
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