Will part ownership of second house affect our mortgage application

[brokeagain]

We are about to apply for a mortgage of 230000, we have saved 20k between us for deposit and have additional savings of 10k to cover other costs.

My other half purchased a house for 180K over 5 years ago with a member of his family who is now living in the house and payng the mortgage so it is not costing him anything. The same house is worth about 145k now.

My question is will the second house affect our application?

We both are in full time employment with a combined incove of over 80K.

 

[wbbs]

Highly likely, the fact is whether he is paying anything towards the mortgage or not he is fully liable for it should the other party be unable to pay and the bank underwriters will look at it from this scenario.

 

[PaddyBloggit]

Yes it will.

 

[Macstuff]

Yes it will. When banks assess loan applications one of the biggest factors they consider is current financial obligations such as term loans, credit card debt etc. as these reduce your monthly disposable income. In this case even though your partner doesn't pay the mortgage he is liable to pay it in the event that the co-owner can't pay. This would reduce monthly disposable income.
Talk to the bank you are going to approach for the mortgage to get their opinion on how much they would lend with and without this co-owned house. Also is his family member in a position to apply for a mortgage on the shared house independantly?