Hi everyone,
I am very very lucky to have been given an opportunity by a family friend to get on the ladder in London. He has offered to invest a large chunk of money in property with me. He will put up about 70% of the price of a property which will pay as a downpayment. I would take a mortgage out for the remaining 30% which would be in my name only. That way the repayments would be affordable for me. I would live in the place.
So he wants this to move quite quickly. Most people get years to save and research mortgages and I am having to get to grips with a lot of knowledge very quickly as I knew nothing about it before! I went to see the bank today (Nationwide) and they said the only way they would give me a mortgage would be if family friend signed something saying that the 70% money was a gift and did not have to be repaid. They said this was because if I couldn't pay the mortgage repayments for whatever reason and they repossessed the house and sold it then they would maybe sell it for less than the original 70% value and therefore couldn't be held to that original investment.
I have totally confused myself on this. I thought I got where they were coming from when they told me. But now I am thinking - the 70% payment would already have been paid. So surely we would already own 70% of the house? The mortgage was only ever for 30% of the house. So why would they have the right to take the whole house?
Very very very confused. Any help or guidance would be appreciated. I've probably just misunderstood the whole thing!
I am very very lucky to have been given an opportunity by a family friend to get on the ladder in London. He has offered to invest a large chunk of money in property with me. He will put up about 70% of the price of a property which will pay as a downpayment. I would take a mortgage out for the remaining 30% which would be in my name only. That way the repayments would be affordable for me. I would live in the place.
So he wants this to move quite quickly. Most people get years to save and research mortgages and I am having to get to grips with a lot of knowledge very quickly as I knew nothing about it before! I went to see the bank today (Nationwide) and they said the only way they would give me a mortgage would be if family friend signed something saying that the 70% money was a gift and did not have to be repaid. They said this was because if I couldn't pay the mortgage repayments for whatever reason and they repossessed the house and sold it then they would maybe sell it for less than the original 70% value and therefore couldn't be held to that original investment.
I have totally confused myself on this. I thought I got where they were coming from when they told me. But now I am thinking - the 70% payment would already have been paid. So surely we would already own 70% of the house? The mortgage was only ever for 30% of the house. So why would they have the right to take the whole house?
Very very very confused. Any help or guidance would be appreciated. I've probably just misunderstood the whole thing!