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2 mortgages

  • hedgeh0g
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01 Oct 12 #358818 by hedgeh0g
Topic started by hedgeh0g
Two quick questions regarding mortgages.

Stbx and I have agreed that she''ll buy a house with her share of the assets, and a joint mortgage to cover the balance as she doesn''t earn, this will be paid by me out of the SM. Will a lender allow this as it won''t be my "primary residence"?

Secondly will I be ale to get a mortgage in the future for myself with the mortgage on her house still being out there? Of course bearing in mind that it will reduce the amount I can borrow, by at least what I owe on the original mortgage?

Thanks in advance

  • LittleMrMike
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02 Oct 12 #358831 by LittleMrMike
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Well, the first difficulty I see here is this. She will buy a house and take out a mortgage partly paid for out of SM. She might find getting a mortgage difficult. The problem with SM from the recipient''s point of view is that it is insecure. With the best will in the world, the payer may die, fall ill, lose his job.
The other thing which hits me is that you seem to imply that she will be the owner of the house she buys ( of course ) but you will be on the mortgage. Well, of course, that alone would present problems for you as it would almost certainly stop you getting a mortgage on your own account,
The third point is that I really can''t recommend you acting as guarantor for a mortgage for a house where you do not live. As a start you must at least seek to limit the extent of the guarantee. A point that I keep on making is that mortgage rates are at a level which is historically low and people who could afford a mortgage now may no be able to afford if rates rise - as I would think they must at some time, because you wouldn''t think they could get any lower.
Do you mind if I make a suggestion ?
Have you considered shared ownership ? I don''t know whether that is a possibility in your neck of the woods, but this seems a much better way of dealing with your difficulty. When I say shared ownership what I mean is that she buys a stake in a property, say 50%, and pays rent for the rest. She may perhaps buy her share outright with no need for a mortgage at all. The point is that if she falls on hard times she can get housing benefit for the rental part - and that is better that you acting as guarantor and it lets you off the hook to buy a property on your own account.
LMM

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02 Oct 12 #358833 by hedgeh0g
Reply from hedgeh0g
Thanks for your reply.

Can we have a joint mortgage even though I''m not resident?

By shared ownership do you mean a property specifically sold as such, or just a legal arrangement between her and I

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02 Oct 12 #358836 by hedgeh0g
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Sorry, further thought. Is it possible for us to buy the house as equity partners? In other words her share of the assets buys 40%, my mortgage buys 60%. We then put something legal in place saying that effectively the house is hers, and that I can''t sell my share without her consent. Also that once the mortgage is paid off it all ecomes hers.

In that case would a lender, assuming I meet their affordability criteria, allow me to take a second mortgage for my own home?

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02 Oct 12 #358837 by LittleMrMike
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The point is that you cannot mortgage something you do not have. You cannot '' have your name on the mortgage '' if she is the sole owner.

You can be a guarantor of your wife''s mortgage if you want to, but I don''t recommend it.

To be sure, there are very many men on this site who originally owned a home jointly with their wife, and who had a joint mortgage, as would be usual. They then got divorced and the wife got the right to remain in the house for ten years or so, during which time they were still liable on the mortgage, at least in theory. But that was because they had borrowed money, they agreed to repay the loan and they remain contractually liable.

Shared ownership is entirely between your wife and the housing association involved. It does not concern you at all, and that, I think, is what you want. May I suggest that you at least look into it ?

LMM

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02 Oct 12 #358841 by hedgeh0g
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Thanks for your advice.

I''ve looked at the shared ownership route and there''s nothing within 5 miles of our current home.

So I guess we''ll have to buy jointly with me living elsewhere (renting).

Sorry if this is a stupid question, but can one have two residential mortgages? If I save hard over the next couple of years I could conceivably have enough for a deposit, plus earnings to take a second mortgage.

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02 Oct 12 #358897 by LittleMrMike
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In law there is nothing to stop you having two mortgages - if you can afford it, and if someone will lend you the money.

From what I gather it''s pretty difficult to find someone who will lend you the money on one mortgage, let alone two.
LMM

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