Cross Charge / Cross Collateral Mortgages

Tattoo10

Hi all,

Heard that some mortgage companies offer a cross collateral mortgage whereby you can use the deeds of a house (in my case, my Mothers house) as a guarantee (and deposit) for a 100% mortgage for a second time buyer.

I have rang several companies such as KBC and Bank of Ireland and they don't do it. Do any of you have any experience with this or know of a lending institution that does this?

I am in negative equity at present but hope to rent my house out and buy a second this way as I have no deposit saved.

Thanks.

4ensic15

Tattoo10 wrote: »

Hi all,

Heard that some mortgage companies offer a cross collateral mortgage whereby you can use the deeds of a house (in my case, my Mothers house) as a guarantee (and deposit) for a 100% mortgage for a second time buyer.

I have rang several companies such as KBC and Bank of Ireland and they don't do it. Do any of you have any experience with this or know of a lending institution that does this?

I am in negative equity at present but hope to rent my house out and buy a second this way as I have no deposit saved.

Thanks.

That would mean that your mother was guaranteeing the mortgage for your buy to let! No wonder the banks aren't interested.

Tattoo10

No its not to guarantee the mortgage for the buy to let. Its for the new house as a deposit. The buy to let is just an idea to see if it helps. I think realistically I would like to sell the house I am in and move on to another. I take it you don't know anything about it then??

Michael D Not Higgins

So there's three houses involved? Your mother's, your current negative equity property and your prospective property?

The bank will most likely want you to get a negative equity mortgage and sell your current property. You are exempt from the central bank rules if you do it that way, but the bank will still apply underwriting criteria to your loan. Due to the near impossibility of repossessing someone's home, they're unlikely to accept it as collateral for another mortgage.

Tattoo10

Thanks for that. The idea of selling my current home is much more appealing than renting it out. Would like not to have the worry of another house on my mind.

Would you have any idea where I could go to look into this? Is it a possibility of perhaps contacting the central bank and getting some advice from them?

Michael D Not Higgins

Tattoo10 wrote: »

Thanks for that. The idea of selling my current home is much more appealing than renting it out. Would like not to have the worry of another house on my mind.

Would you have any idea where I could go to look into this? Is it a possibility of perhaps contacting the central bank and getting some advice from them?

The Central Bank are a regulatory institute for the sector, not an advisory body for individuals. They are unlikely to give you any advice as it's not their remit.

Your best bet is going to a broker, your current bank, or another bank, and discussing options. What they can offer will be dependent on your circumstances, e.g. the amount of negative equity, the amount you're looking to borrow, your salary, your expenses, etc.

Tattoo10

Never even thought of a broker.. Thanks mate. Will get in touch with one of them.

4ensic15

Tattoo10 wrote: »

No its not to guarantee the mortgage for the buy to let. Its for the new house as a deposit. The buy to let is just an idea to see if it helps. I think realistically I would like to sell the house I am in and move on to another. I take it you don't know anything about it then??

You are making no sense. A deposit of title deeds is of no use to man or beast unless they are pledged as security. Since you don't own the title deeds or the house, it means your mother would have to pledge her house as security for the loan. If you didn't keep up payments on the new house your mother would lose hers.

L1011

These types of scenario were commonly offered before the crash, and eliminated during it due to how many went sour. I haven't heard or them coming back, and I'd rather prefer they didn't.

Tattoo10

Maybe its not the road to pursue I think at this stage. I may hold off and see about getting a deposit from the sale of my house. Might be longer than anticipated but probably the best way of doing things. Thanks for all the advice.