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Anyone know how banks view existing joint mortgage?

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  • 30-04-2014 1:46pm
    #1
    2rkehij30qtza5
    Closed Accounts Posts: 1,476 ✭✭✭


    Hi,
    I've a property that I co-own with my parents. The mortgage account with the bank is in our three names (both my parent's and mine). The property is rented out but the rent is significantly less than the mortgage owed.
    I pay 50% of the shortfall every month and my mum pays the other 50% of the shortfall. This has been going on for 6 or 7 years. So this essentially proves a 50-50 ownership on the property.
    Myself and my husband want to apply for a mortgage ourselves. The bank we want to apply through is not the same bank as who myself and my parents have the mortgage with. Not sure if this makes a difference.
    Anyway my husband says that the bank doesn't care if you have a 50-50 mortgage already...they will treat it as though I own the full 100% of the property...even though my parents names are on the mortgage account and there are years of statements showing mum paying 50% of the deficit.
    The reason I am asking here and not asking the bank is that I don't want to be basically telling them anything that could give cause for a refusal on our mortgage application.
    If I am basically treated like I own 100% of the property I am not in a good position, but if I am treated like I own 50% then I think we can get a mortgage for our own home.
    Does anyone know what way the banks view these things??
    Thanks in advance.


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    #2
    draiochtanois
    Registered Users Posts: 2,655 ✭✭✭draiochtanois


    This post has been deleted.


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    #3
    2rkehij30qtza5
    Closed Accounts Posts: 1,476 ✭✭✭2rkehij30qtza5


    draiochtanois wrote: »
    You are probably liable for the full 100% if your parents won't or can't pay so the bank will see this as 100% ownership.

    They will probably only recognise 50% of the rental income

    If you have made full repayments for 7 years it will be an advantage

    If it is or has been interest only it will be a big disadvantage

    What they would want to see is you having the disposable income to pay the existing mortgage in full (if there was a problem with rent and or your parents paying) + your new mortgage

    Thanks very much. I am scuppered so until we can sell the property...which will be in around 10 years time. Thanks for the info.


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    #4
    Trish56
    Registered Users Posts: 1,256 ✭✭✭Trish56


    You are jointly and severally liable for the full mortgage repayments on the rental property. Depending on the lender if the property is in negative equity they may not take any of the rental income into account. Are you on a tracker mortgage if so it may be easier to get a new mortgage as opposed to the standard variable which stress tested is approx. 7.35%.

    I think you should contact your bank or existing lender, the fact that you have never missed a payment and that they can see the payments coming in from both yourself and your Mam should help. Lenders are not as strict in applying policy/criteria as they were over the past few years so I definitely would make enquiries...you have nothing to lose.


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