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asking a very big favour of a distant relative

16 replies

mumblesale · 14/08/2011 13:53

We need to move house but cannot get a bigger mortgage. I have a mortgage in my name, and a good amount of equity in my flat, which we currently live in. We have a 30% deposit, if I sell it and DP puts his savings in. Noone will lend because we are both freelance, believe me, we have tried very hard.

Our only option is a guarantor. DP has an uncle who is very very wealthy. It's his father's brother. We don't really have anything to do with him, I've met him once and we used to be friendly with his son when we lived abroad.

Last year due to a critical situation in the family (death, etc.) we took in DP's nephew. Nephew was part brought up by DP's father after his parents died. We are bringing him up to the very best of our abilities but we are severely hampered by the fact that we do not have room in our flat (2 year old DS has no bedroom) and also we are in an area with bad schools.

DP's mum recently asked him to pay us back a largish amount of money we had lent DP's dad, or rather he had managed to extract from us (DP's dad is mentally ill) because we needed it (so he owed it to brother rather than us iyswim). He refused.

DP thinks he may guarantee our mortgage because it is a safe deal (we have a 30% deposit) and he won't actually have to give us any money. We would pay legal costs and sign a document stating we will take him off the mortgage in 5 years when DN turns 18 or sooner even if it means we have to sell.

Is this a really cheeky thing to do? I'm half sure he'll say no, because of the other money thing.

WWYD?

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Giddly · 14/08/2011 14:06

I don't see that you have much to loose, really, althout is is a big thing to ask and I can see why you're ucomfortable. I would ask in writing, setting out all the financial arrangements you have in place, and offering to provide proof of past income etc. Do it on a very business like footing. Make it clear it will be nothing like the previous request (which sounds like it was unlikely he would get the money back).
Presumably DN is also his great nephew? I would imagine he could feel some sense of responsibility towards him.

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mumblesale · 14/08/2011 14:25

Thanks Giddly. I think you're spot on that it must be a business proposition - we were going to visit him in person though. The other complication is, we feel we should be married (uncle is very traditional) before we ask him. We're engaged - I was hoping to be able to have at least a tiny wedding, but we can't really afford that under the circumstances. We both earn quite good money - we're not pleading poverty at all. It's just the bloody mortgage market. And would we ask him to the wedding? Or tell him at the point of asking that we are planning to get married, then ask him.

When DP's mum asked him for the money (it was 3k, so a lot at the time for us for not much in the grander scheme of things) we had move out our rented flat losing a few thousand because we'd only just moved in. DN needed tutoring because he had missed 3 months school. That didn't make any difference to him.

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mumblesale · 14/08/2011 14:26

Just to be clear, the reason we had to move out of the rental was DN coming to live with us very suddenly.

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Giddly · 14/08/2011 14:28

Hmm. It doesn't sound like he's be too receptive, but no reason not to ask him. Has he shown any interest in your DN's situation?

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mumblesale · 14/08/2011 14:44

None at all. Noone has, actually. All other parts of the family are very wealthy, just DP's immediates who are poor. We were the only takers though!

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northerngirl41 · 15/08/2011 09:14

I'd go back to the mortgage brokers - with 30% deposit and 2 years trading accounts, you should be able to get a "self-cert" mortgage (albeit the modern version of it which involves raking you over the coals).

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mumblesale · 15/08/2011 12:25

Hi Northerngirl. What's this modern version of it? I would love to hear, I too can't help thinking someone must lend to me. I have perfect credit score and bank rating too. All the self-cert ads on-line said product no longer available. I've got 8 years trading accounts.

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northerngirl41 · 15/08/2011 17:28

You won't find it from a high street bank - you need to go and speak to "high risk" mortgage specialists, commercial mortgage providers or a broker who you trust (that's a bit of an oxymoron, I know!).

Expect for them to ask VERY intrusive questions about your income, you must have been paying tax to correspond with your take home salary, they will want to see about a year's worth of bank statements from both you and your partner plus accounts from both of the businesses. The paperwork is just immense.

They are out there - keep looking!!!

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mumblesale · 17/08/2011 14:47

I've spoken to more 'creative' brokers, ones specialising in contractors, freelancers etc. and they checked out our situation but again have drawn a complete blank. The only one who has promised anything would need us to falsify our income. THe nature of DH business is the problem. I really CAN'T get a mortgage (other than the one I've already got, which was meant to be portable but turns out not to be very portable). I think the only other option, and perhaps this is what you mean, is a private mortgage?

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northerngirl41 · 17/08/2011 18:38

Nope - we got ours thru Santander thru a specialist broker - essentially the broker acted as a "character reference" for us and made sure we ticked all the right boxes.... I'm fairly sure some of the stuff was falsified (for example I'm down as "homemaker" since my business technically didn't make a profit the year before we applied and they didn't want to raise any red flags on the system, despite the fact I pay half the mortgage!).

Some businesses they really won't touch though - high risk or export or ones not earning enough to support higher interest rates or the repayments. It does suck majorly!

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mumblesale · 17/08/2011 21:32

DP is a professional gambler, good income but inspires heebeegeebees in the financial sector.
My mortgage is with Santander and the broker said if I gave up my deal and reapplied as a previous client there was only a 50% chance they would check my income claims but of course, if they did, I would screw up my credit rating. Not really a goer.

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northerngirl41 · 17/08/2011 22:27

Ah thought so - I have a friend who does the same and is looking to upgrade his house.... But no go with the nasty banks. They want cash purchase or nada I'm afraid.

One thing you might look into doing is dressing it up as a "sports investment" company - they may see thru it of course, especially if they ask to see business bank accounts.

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mumblesale · 18/08/2011 06:55

Thanks Northerngirl, DP does more financials than sport, he got his last mortgage as an options trader, but those were different times. We've also now found out that the guarantor option won't work either, so uncle is off the hook. Would you mind passing on your specialist broker contact?(pm if you don't want to put it on here)?

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northerngirl41 · 18/08/2011 12:20

They are a big firm - Positive Solutions, but TBH we had a massive barney with them after they screwed up the actual amount of the mortgage, so I'd not 100% recommend them. Maybe get them to talk you thru who might lend?

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mumblesale · 18/08/2011 15:16

Not holding out much hope though after the specialist contractor people said they couldn't help I fear we have to sit out the crunch and keep adding to our capital. Thanks for your help

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hairylights · 27/08/2011 21:50

I would never ask a close relative let alone a distant one to do this.

It's a bit that your mum asked him to payback someone else's debt - thats bizarre - unless I've misunderstood.

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