Mortgage Advice

[B17NNS]

My ex mother in law owns a house that is mortgaged on an interest only basis.

I renovated the property and due to a split with her daughter I now live in it.

I would like to buy it but due to a few credit issues am currently unable to get a mortgage. A situation which will hopefully change in a year or two as I rebuild by credit rating.

Now the problem is my ex MIL is rapidly facing retirement and her entitlement to a mortgage is fast running out.

My question is, what are the chances of the mortgage company allowing us to continue the mortgage past her retirement up until the point that I am credit worthy enough to take it on?

[Sarnie]

B17NNS said:

My ex mother in law owns a house that is mortgaged on an interest only basis.

I renovated the property and due to a split with her daughter I now live in it.

I would like to buy it but due to a few credit issues am currently unable to get a mortgage. A situation which will hopefully change in a year or two as I rebuild by credit rating.

Now the problem is my ex MIL is rapidly facing retirement and her entitlement to a mortgage is fast running out.

My question is, what are the chances of the mortgage company allowing us to continue the mortgage past her retirement up until the point that I am credit worthy enough to take it on?

None, unless she has sufficient verifiable income that is acceptable to the lender.

[B17NNS]

Sarnie said:

None, unless she has sufficient verifiable income that is acceptable to the lender.

Deputy head final salary pension scheme plus a nice golden handshake?

[Deva Link]

B17NNS said:

Now the problem is my ex MIL is rapidly facing retirement and her entitlement to a mortgage is fast running out.

My question is, what are the chances of the mortgage company allowing us to continue the mortgage past her retirement up until the point that I am credit worthy enough to take it on?

You seem to be suggesting that the mortgage will cease on her retirement? It won't it'll just carry on, unless by co-incidence, or design, it's due to end anyway.

[mikees]

Hope it works out mate but sounds fraught with danger. Be careful.

[B17NNS]

Deva Link said:

You seem to be suggesting that the mortgage will cease on her retirement? It won't it'll just carry on, unless by co-incidence, or design, it's due to end anyway.

I'm just concerned they will force a sale or reposes.

[Deva Link]

B17NNS said:

I'm just concerned they will force a sale or reposes.

Why would you even think that?

[cailean]

If she has a final pension scheme with guaranteed income then they may continue the mortgage. I know someone in his late 70s still with a mortgage on his house, crazy if you ask me but possible if that is what is wanted.

[JezHill]

Firstly, if you are concerned, why not ask the mil when the current term expires. Prior to the credit crunch lenders allowed the term to go to age 85 no questions asked and she may have taken this option. If the term is coming to an end, you can extend it or re- mortgage to a different lender. The current rules are that most lenders allow a term to age 75 but the mil must have sufficient income in retirement to justify this (golden handshakes are not included, only the income from her pension(s). If this is not enough, then most will allow a term to 70 basing eligibility on her current salary.

(edited due to too many mince pies affecting my ability to type)

Edited by JezHill on Monday 2nd January 20:36

Edited by JezHill on Monday 2nd January 20:39

[B17NNS]

Cheers guys.

Speaking with the MIL in the week so we shall see.

Just be a shame to loose a) my home, b) somewhere I've put in many, many hours of work and c) a nice place at well below market value.

[scotal]

B17NNS said:

I would like to buy it but due to a few credit issues am currently unable to get a mortgage. A situation which will hopefully change in a year or two as I rebuild by credit rating.

How bad are your credit issues?
How high is the LTV?

there are a coupl of lendrs back in the impaired market.
Rates aren't market leading, but in the right circumstances you might be able to buy the house.

[Deva Link]

B17NNS said:

Cheers guys.

Speaking with the MIL in the week so we shall see.

Just be a shame to loose a) my home, b) somewhere I've put in many, many hours of work and c) a nice place at well below market value.

I'm still confused about what's going on - unless I'm missing something, the lender won't even know she's retired so as long as the mortgage keeps being paid there won't be a problem.

How long has she had the mortgage? If it's quite a few years then the amount borrowed won't be all that high. How was she proposing to pay it off at the end of the term anyway - she must have some repayment vehicle in place.

Is your ex-MIL really going to let you have the place cheap - why would she do that? Would her daughter not stand in the way? I'm wondering if this apparent awkwardness with the mortgage could just be a way to get you out of the house.

Edited by Deva Link on Tuesday 3rd January 12:21

[B17NNS]

[quote=scotal]

How bad are your credit issues?

No CCJ's or IVA's. Just late payments on credit cards and loans - I've since set up reduced payments with these.

I own another property outright that is currently tenanted but am unable to raise funds from it due to my credit.


How high is the LTV?

On the new property I would be looking to lend the maximum.
Property currently on the market at £170k. She will sell to me for for £150k.

there are a coupl of lendrs back in the impaired market.
Rates aren't market leading, but in the right circumstances you might be able to buy the house.

I'm all ears.

[B17NNS]

Deva Link said:

I'm still confused about what's going on - unless I'm missing something, the lender won't even know she's retired so as long as the mortgage keeps being paid there won't be a problem.

How long has she had the mortgage? If it's quite a few years then the amount borrowed won't be all that high. How was she proposing to pay it off at the end of the term anyway - she must have some repayment vehicle in place.

Is your ex-MIL really going to let you have the place cheap - why would she do that? Would her daughter not stand in the way? I'm wondering if this apparent awkwardness with the mortgage could just be a way to get you out of the house.

Edited by Deva Link on Tuesday 3rd January 12:21

Spoken to her this morning. She definitely wants rid. Auction is March 3rd.

[B17NNS]

Oh, and just to make matters a little more interesting, I'm self employed and my accounts are shall we say not showing great profits.

I'd probably be looking to rent the place out and take a room at my mums for a while. Rental income would be circa £650pcm. Other property earns me £550pcm. and is worth about £125k.

[Deva Link]

B17NNS said:

Spoken to her this morning. She definitely wants rid. Auction is March 3rd.

Ah - that's a bit different to the scenario in your first post. It makes more sense now, but it's bad news for you.

[MortgageAdvisorJ]

Hi B17NNS

If you want any free advice please get in touch - more than happy to help out a fellow PHer!

Seems like you're getting plenty of advice anyway to be fair but here to help if you need me.

Thanks
J