Keyworker housing & mortgages.
Discussion
In need of some advice chaps and chapesses.
I currently have a property and a keyworker equity loan (this is a second charge on the property as a percentage of the property value)
Now my property is not big enough for the needs of my family and i was looking at moving to another property which is more appropriately sized.
I have contacted keyworker housing (catalyst) about porting the loan (with no extra borrowing from their point of view) but they arnt having any of it and say they wont authorise the porting.
Currently we have little equity in the house (say 10K) and a small amount of cash for savings.
Current mortage is around £106K (4.99% fixed untill june 2010) £48k with keyworker which i think is a percentage of about 32% based on total price when brought of £171K.
The mortgage took they keyworker loan as a technical deposit but its secured on the home as a second charge.
I am looking at a more expensive property and increase in borrowing via mortgage.
However as keyworker wont allow the porting of property and very little equiry / deposit we wont meet the % equity that most banks require these days.
Say £250K property.
My house value has stayed around the same price and maybe gone up a little as we got a good deal on the house at the right time.
Can anyone advise if its possible to get a second loan / mortage to cover the keyworker loan and secure it as a second charge, allowing me to goto a lender with a high equity / deposit.
This meaning we repay keyworker giving us £48k + say 6k equity.
But the £48k would be a secured loan / second mortgage as a second charge.
Hopefully that makes sense!
I currently have a property and a keyworker equity loan (this is a second charge on the property as a percentage of the property value)
Now my property is not big enough for the needs of my family and i was looking at moving to another property which is more appropriately sized.
I have contacted keyworker housing (catalyst) about porting the loan (with no extra borrowing from their point of view) but they arnt having any of it and say they wont authorise the porting.
Currently we have little equity in the house (say 10K) and a small amount of cash for savings.
Current mortage is around £106K (4.99% fixed untill june 2010) £48k with keyworker which i think is a percentage of about 32% based on total price when brought of £171K.
The mortgage took they keyworker loan as a technical deposit but its secured on the home as a second charge.
I am looking at a more expensive property and increase in borrowing via mortgage.
However as keyworker wont allow the porting of property and very little equiry / deposit we wont meet the % equity that most banks require these days.
Say £250K property.
My house value has stayed around the same price and maybe gone up a little as we got a good deal on the house at the right time.
Can anyone advise if its possible to get a second loan / mortage to cover the keyworker loan and secure it as a second charge, allowing me to goto a lender with a high equity / deposit.
This meaning we repay keyworker giving us £48k + say 6k equity.
But the £48k would be a secured loan / second mortgage as a second charge.
Hopefully that makes sense!
www.housepricecrash.co.uk would be where youd likly get much better advice.
^Slider^ said:
In need of some advice chaps and chapesses.
Its a difficult one this, I'm a financial adviser that's on the panel of approved advisers with Sovereign Housing group in Bristol & I've come across it a few times. As you said they wont let you port it to another property. Secured loans are really expensive & at the moment there aren't many lenders that will go over 80% of the new property value so that doesn't help at all.Is your current lender Nationwide? For existing customers moving home they do offer 95% LTV mortgages, it could be worth selling up, leaving the key worker scheme all together & porting your deal on to a new house & increasing your mortgage with Nationwide & putting down a 5% deposit. You will have to choose a different product for the extra you want to borrow but they will-may consider it. This of course also means your income etc has to be sufficient to borrow the amount you need as well. Its worth giving them a call & see what they say. If your not with Nationwide then forget all that!
Sorry mate but there aren't many options unfortunately.
splodge s4 said:
^Slider^ said:
In need of some advice chaps and chapesses.
Its a difficult one this, I'm a financial adviser that's on the panel of approved advisers with Sovereign Housing group in Bristol & I've come across it a few times. As you said they wont let you port it to another property. Secured loans are really expensive & at the moment there aren't many lenders that will go over 80% of the new property value so that doesn't help at all.Is your current lender Nationwide? For existing customers moving home they do offer 95% LTV mortgages, it could be worth selling up, leaving the key worker scheme all together & porting your deal on to a new house & increasing your mortgage with Nationwide & putting down a 5% deposit. You will have to choose a different product for the extra you want to borrow but they will-may consider it. This of course also means your income etc has to be sufficient to borrow the amount you need as well. Its worth giving them a call & see what they say. If your not with Nationwide then forget all that!
Sorry mate but there aren't many options unfortunately.
Do you or anyone know of any decent deals for remortage or second loans.
I think my main issue is going to be the second loan as it may not be considered as a deposit even if it is a second charge.
My income should support the price im looking at on the multiples, and im not going to skint myself out just to move house!
Thanks!
Gareth
^Slider^ said:
Do you or anyone know of any decent deals for remortage or second loans.
A remortgage is a mortgage to replace your existing mortgage if your NOT moving house. As you have penalties & are already on a pretty good rate then its definitely not worth it.A new mortgage on a new property (new as in your moving & not necessarily a newly built property), rates totally depend on your deposit. Really the minimum is 10% deposit so £25k if your looking to go to £250k. If your income is enough to borrow £225,000 then if you look about you might find rates around 5.99%ish. That scenario is if you sold your existing place, repaid your current mortgage & the key worker loan & started fresh. If you ported your current mortgage then Abbey rates to 90% are about 6.8%ish so not nearly as good but that would only be for the extras amount you want to borrow.
Its all about the size of your deposit, with 25% dep then your looking at rates around 4%. Hope that sort of helps mate. I'd still have a chat with Abbey & run through the options with them, see what they say. The bottom line is if the Key worker loan cant be ported to another property then it will have to be repaid if you move.
Hi Slider. I was in a similar position with our mortgage. We ae also in a key worker scheme whereby a third party have a 23% stake in our home as an interest free loan that is only paid back upon us selling the house.
When we took out the mortgage in 2005 all the banks considered the 23% from the key worker scheme to be a deposit. When I tried to remortgage last month most banks no longer considered the capital from the key worker scheme to be equity. However, there are still a small number of banks that do consider the this to be equity. Therefore it will just be a case of hunting around.
Try these. The bloke I spoke to was very helpful.
http://www.keyworkermortgages.org/
When we took out the mortgage in 2005 all the banks considered the 23% from the key worker scheme to be a deposit. When I tried to remortgage last month most banks no longer considered the capital from the key worker scheme to be equity. However, there are still a small number of banks that do consider the this to be equity. Therefore it will just be a case of hunting around.
Try these. The bloke I spoke to was very helpful.
http://www.keyworkermortgages.org/
mat59 said:
Hi Slider. I was in a similar position with our mortgage. We ae also in a key worker scheme whereby a third party have a 23% stake in our home as an interest free loan that is only paid back upon us selling the house.
When we took out the mortgage in 2005 all the banks considered the 23% from the key worker scheme to be a deposit. When I tried to remortgage last month most banks no longer considered the capital from the key worker scheme to be equity. However, there are still a small number of banks that do consider the this to be equity. Therefore it will just be a case of hunting around.
Try these. The bloke I spoke to was very helpful.
http://www.keyworkermortgages.org/
Thanks for that, Its exactly the same situation im in!When we took out the mortgage in 2005 all the banks considered the 23% from the key worker scheme to be a deposit. When I tried to remortgage last month most banks no longer considered the capital from the key worker scheme to be equity. However, there are still a small number of banks that do consider the this to be equity. Therefore it will just be a case of hunting around.
Try these. The bloke I spoke to was very helpful.
http://www.keyworkermortgages.org/
Did you have any joy in your case?
Yes, but we were lucky. We have been on a variable rate for several months as we were planning on moving away from the area. When the price crash happened we decided to put these plans on hold for a few years. We wanted to fix the mortgage for a few years as rates are relatively low and this would mean we could save a fair bit of money. Forunately the company we were already with, Chelsea, would accept the key worker capital as equity. Unforunately, due to the crash we didn't have enough equity to get the 25% deposit deal they were offering as the theoretical value of the house was too low according to the Halifax price index. It was only a few percent out so we simply waited it out a few months as prices were creeping back up. As you know, prices have gone up a few percent according to Halifax and Nationwide so we crept over the percentage figure and qualified for the mortgage.
It's all nonsense of course because Chelsea calculated the value of our house on what we paid for it a few years ago and then simply subtracted the amount that prcies had fallen in the area. We've spent a small fourtune in improving the condition of the housein the mean time.
IMHO if you have a 25% deposit including the key worker capital you will be able to find a mortgage that will accept you. However, if you are still in a fixed rate deal you will have to pay the penalty for ending the agreement early.
I'm just hoping prices go up a little over the next few years. We'll save in the mean time and overpay the mortgage. Hopefully when the fixed rate is up we'll be able to move comfortably.
Saying that i'm picking up my e46 M3 tomorrow so the chances of me saving money all depends on whether it goes wrong very often! Has to be done though.
Good luck anyway. Phone that guy's company i linked earlier. Although I didn't go with him he was very useful.
Matt
It's all nonsense of course because Chelsea calculated the value of our house on what we paid for it a few years ago and then simply subtracted the amount that prcies had fallen in the area. We've spent a small fourtune in improving the condition of the housein the mean time.
IMHO if you have a 25% deposit including the key worker capital you will be able to find a mortgage that will accept you. However, if you are still in a fixed rate deal you will have to pay the penalty for ending the agreement early.
I'm just hoping prices go up a little over the next few years. We'll save in the mean time and overpay the mortgage. Hopefully when the fixed rate is up we'll be able to move comfortably.
Saying that i'm picking up my e46 M3 tomorrow so the chances of me saving money all depends on whether it goes wrong very often! Has to be done though.
Good luck anyway. Phone that guy's company i linked earlier. Although I didn't go with him he was very useful.
Matt
Gassing Station | Finance | Top of Page | What's New | My Stuff