Annoyed Readers Question

by Readers Question

7:20 AM, 14th March 2017
About 2 years ago

Annoyed Readers Question

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Annoyed Readers Question

My cousin is 28 and an FTB in a relatively cheap area (2 bed terraces £125-135k). She has a 20k deposit saved up but due to her income of 20k she can only get a maximum of £82k mortgage – too short by about 25-35k. Annoyed Readers Question

I therefore thought that I could help. Relatively wealthy, good income. Could I guarantee her a loan for, say, £115k? Its easily affordable even in worst case scenarios. But no. Guarantees from anyone these days are not allowed, unless you’re a parent, and not usually then.

What if I went in as a co-mortgagor? What loan could she get then? (Frankly, I’ve got enough to buy the house in cash). She could get nothing more – of course! – because my property income, healthy though it is, cannot be taken into consideration! Why the hell not, its been going 20 years and is definitely on the north side of average?!?!

Eventually I find a lender who might offer us – combined, you understand – £118k. Whoopee-doo. But guess what? If Im a co-mortgagor, my cousin’s £200 SDLT becomes £4250 just because I’d be added to the loan. That’s REALLY helpful to a struggling FTB!

So some points become apparent:

*FTB’s are unable to get on the ladder because they cannot get mortgages, however well-backed they are.

*Given this is true, exactly which FTB’s are fueling the 100% increase in their numbers these last 6 years? Are they all incredibly well off? And if they are, renting from us clearly hasn’t harmed their prospects.

*Property income is worthless if you’re a lender, but is massively important if you’re a tax man. Funny, that…

*The new SDLT rules stink.

*Talking of SDLT, the government keeps on about making property equal to shares, yet stamp duty on shares of £135k is… £675. Not bloody £4250!

Annoyed.



Comments

David Price

7:50 AM, 14th March 2017
About 2 years ago

Game, set and Match to Mr Osborne!

Whiteskifreak Surrey

8:59 AM, 14th March 2017
About 2 years ago

Reply to the comment left by "David Price" at "14/03/2017 - 07:50":

And that pasty-face individual is back and is backing Brexit - and after another big Gov job, to ruing the economy even more. Disgusting. And ridiculous.
I just cannot believe what the Annoyed Leader goes through... You could not made that up.

Lucie Wade

9:04 AM, 14th March 2017
About 2 years ago

There's a lender that will allow you on the mortgage but you don't go on the deeds therefore avoiding the stamp duty and will take property income. If I get time today I'll pop the details on here for you

Laura Delow

9:30 AM, 14th March 2017
About 2 years ago

Another alternative to consider if your cousin is prepared to and can find a new build for say £125K, she could apply for a 20% Help to Buy Equity loan + £20K deposit = £80K mortgage required.

Luke P

10:15 AM, 14th March 2017
About 2 years ago

Reply to the comment left by "Laura Delow" at "14/03/2017 - 09:30":

Hasn't HTB been shelved now?

Laura Delow

10:36 AM, 14th March 2017
About 2 years ago

It's available until 2020

Laura Delow

10:41 AM, 14th March 2017
About 2 years ago

The 20% H2B Equity Loan (up to 40% in London) is currently open until 2020. You may be thinking of the Help to Buy Mortgage Guarantee Scheme that closed Dec 2016

Dani Matthews

11:34 AM, 14th March 2017
About 2 years ago

Reply to the comment left by "Laura Delow" at "14/03/2017 - 09:30":

I'd research help to buy carefully. new build properties add a big ground rent charge & management charge even for houses. To repay the help to buy loans you have to pay for a valuation (which is fair enough) but then also have to take into account solicitors fees (? £400- £500) & an admin fee of £200-£250, depending on type of fist buy loan. So if you pay the loan in two installments you have two lots of fees to pay. There's first time buyers stuck in these new builds. Google echo & speakman gardens. Just read the small print & be aware of fees attached to paying off these loans meant to help the first time buyer!

Janet Carnochan

21:39 PM, 14th March 2017
About 2 years ago

You could lend her say a 20% deposit. Then put a charge on the property where everything was done legally. I believe that there would be no additional stamp duty to pay. Also she may be able to get a better mortgage rate at she would have a bigger deposit.

Laura Delow

7:34 AM, 15th March 2017
About 2 years ago

Reply to the comment left by "Janet Carnochan" at "14/03/2017 - 21:39":

Aslong as the lender sees this gifted deposit as an outright gift ie is non repayable otherwise the lender will include the 20% loan in with her overall borrowing when assessing how much they will lend her - back to square one. They'll therefore want a letter from you stating this 20% is an outright gift which is non redeemable & you will have no interest in the property.

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