110% mortgages

[ChuffingHell]

Am thinking of leaving my other half who I currently share a house and pay a mortgage on, although I am not on the mortgage or the deeds because I was self employed at time of its purchase and rather than go self cert, we were able to get the mortgage we needed on his salary alone.

He earns more than me but since I have been paying my way and contributing towards the house, bills and mortgage - roughly a 60/30 split in terms of income - I feel no guilt in walking away as he will be the one who gets all profits made through selling. I also don't think, if I did leave, I'd take any of the furniture which I have also paid towards. And I put in a lot of work to get the house to its current state; decorating, an extension etc.

Anyway. because of what we have spent on the property, I have no savings and thus could not put down a deposit at the present moment.

As I think I will be moving areas (I currently live in London and places are chuffing expensive and plan to move to Manchester), I will have to find a new job and thus will have to rent for a few months, giving me opportunity to save some � for the fees while also looking for the perfect place. However, as I will need to buy furniture and could also do with buying a car, I have been thinking about whether I could get an extra 10% of the property value to do that.

Does anyone have any experience of this?

[dans1977uk]

Hi, in principle the answer is a resounding yes. There are a number of banks who will lend more than the value of a property, up to 125% or more infact. The best known lender for this type of mortgage is Northern Rock, though BM Solutions (aka Birmingham Midshires) have also recently launched a similar product. Coventry Building Society and Mortgage Express also offer 125%+ products.

I'd suggest you seek an independant mortgage advisor who you trust and who won't charge you too big a fee (over �695 is getting a bit high!) to arrange it all for you.

If you want to work out how much you can afford just take your annual gross salary (before tax is taken off), subtract your annual loan repayments (monthly payment times 12) then times what's left by about 5. This is the absolute maximum you could borrow.

Therefore, if you earn �25,000 and pay �200 per month on debts it leaves �25,000 - �2,400(�200 x 12) = �22,600. This times 5 equals �113,000. So, if you bought a property for about �103,000 you'd have �10,000 left over if you went to the maximum.

I wish you the best of luck!

Warm Regards,

Dan

[dolly pond]

cant u get some money from the house? surely if you can prove you have contributed, then seek legal advice, dont walk away empty handed!

[morbidstorm]

I work in estate agency, and the most common lender I come across lending more that 100% loan to value is Northern Rock. I believe they are actually quite fair aswell.