Any idea how i can get round this?

samson1313 · 18 June 2017 at 12:44PM

The sale of my house has just fell through at the last minute so now rather than go through all the hassle and months of putting the house back up for sale i'm thinking about a remortgage (i currently have no mortgage on the property i own it outright)

The plan for selling the house was to clear all my outstanding debts live with my dad for a month or two till all this had gone from my credit file (i have no missed payments, defaults or anything bad on my file just £28000 of outstanding debt which causes my rating to be currently 832 out of 1000) so once paid off my score should go right up then to apply for a mortgage on a new smaller property and use the remaining £100000 to put into another property to renovate and sell on.

I'm self employed my SA302s for the last few years show me earning about £24000 per year so going by that i should be able to get a mortgage of around £100000 - £108000

The problem is i have current debts on cards and a loan of £28000 so my monthly outgoings on these plus usual bills come to about £700 per month so when they do an affordability calculation i end up screwed

With a remortgage i would clear all the debt which would bring my monthly outgoing down to about £180 plus the monthly mortgage payment which would be easily afforded

I know i could just get say a £30000 mortgage and clear my debts but that would give me no money for a new project property which is what i really want to do (and should increase my earnings)

Can anyone see a way round all this or are there mortgage companies that will take into account that i plan to clear all my current debt with the new mortgage i feel stuck at the moment and its really annoying!

By the way the cards are currently all at 0% and the loan is from tesco at 3.9% so juggling cards and loans round is not what i want to mess about with at present, paying extra every month for the next 2 years is really not what i want to do i just want all these silly debts gone, i dont mind having a mortgage but had enough of cards and loans.

ACG · 18 June 2017 at 12:58PM

It would be a Let to buy Mortgage (which is basically a Buy to let mortgage).
If you keep the property and buy a new one, you would need to pay higher rate stamp duty.

samson1313 · 18 June 2017 at 1:21PM

Hi no i want a standard residential mortgage and stay in my current property with the funds left over from the mortgage after paying off my current debts in the bank ready to buy another property if a good deal comes along at auction etc

ACG · 18 June 2017 at 1:23PM

Some lenders wont do it, others will. It is just a case of checking with the lenders before applying or getting a broker to do the leg work for you.

samson1313 · 18 June 2017 at 1:39PM

Ok thanks i'll make an appointment with a broker this week then and see what can be done

getmore4less · 19 June 2017 at 7:16AM

samson1313 wrote: »

The sale of my house has just fell through at the last minute so now rather than go through all the hassle and months of putting the house back up for sale i'm thinking about a remortgage (i currently have no mortgage on the property i own it outright)

The plan for selling the house was to clear all my outstanding debts live with my dad for a month or two till all this had gone from my credit file (i have no missed payments, defaults or anything bad on my file just £28000 of outstanding debt which causes my rating to be currently 832 out of 1000) so once paid off my score should go right up then to apply for a mortgage on a new smaller property and use the remaining £100000 to put into another property to renovate and sell on.

I'm self employed my SA302s for the last few years show me earning about £24000 per year so going by that i should be able to get a mortgage of around £100000 - £108000

The problem is i have current debts on cards and a loan of £28000 so my monthly outgoings on these plus usual bills come to about £700 per month so when they do an affordability calculation i end up screwed

With a remortgage i would clear all the debt which would bring my monthly outgoing down to about £180 plus the monthly mortgage payment which would be easily afforded

I know i could just get say a £30000 mortgage and clear my debts but that would give me no money for a new project property which is what i really want to do (and should increase my earnings)

Can anyone see a way round all this or are there mortgage companies that will take into account that i plan to clear all my current debt with the new mortgage i feel stuck at the moment and its really annoying!

By the way the cards are currently all at 0% and the loan is from tesco at 3.9% so juggling cards and loans round is not what i want to mess about with at present, paying extra every month for the next 2 years is really not what i want to do i just want all these silly debts gone, i dont mind having a mortgage but had enough of cards and loans.

you need to sort out why you are in debt, what will stop it happening again.

How big were the debts 5 years ago?

you are not clearing debts by mortgaging just moving them, in your case to something more costly, more interest than you are currently paying and for much longer by the looks of it.

You say £28k debt that is costing (£700-£180pm) £520pm.

Around 5y to pay it all if at the average rate was the same as tesco loan but you say some is cheaper on 0% so that interest will be lower.

total interest will be £2,900 over the 5 years

with mortgage rate of say 2.5% that £28k
5y £497pm interest £1,800
10y £264pm interest £3,700

you only save interest if you pay them of at a lower rate take the lower payment over a longer term and it will cost more.

whats the business plan for this project property look like(you do have one?) how much do you need to purchase(inc the extra SDLT), do it up cover costs like council tax etc, how much will you make after the income the tax on the profits.

samson1313 · 19 June 2017 at 3:30PM

getmore4less wrote: »

you need to sort out why you are in debt, what will stop it happening again.

How big were the debts 5 years ago?

you are not clearing debts by mortgaging just moving them, in your case to something more costly, more interest than you are currently paying and for much longer by the looks of it.

You say £28k debt that is costing (£700-£180pm) £520pm.

Around 5y to pay it all if at the average rate was the same as tesco loan but you say some is cheaper on 0% so that interest will be lower.

total interest will be £2,900 over the 5 years

with mortgage rate of say 2.5% that £28k
5y £497pm interest £1,800
10y £264pm interest £3,700

you only save interest if you pay them of at a lower rate take the lower payment over a longer term and it will cost more.

whats the business plan for this project property look like(you do have one?) how much do you need to purchase(inc the extra SDLT), do it up cover costs like council tax etc, how much will you make after the income the tax on the profits.

£105000 mortgage monthly payment s would be aprox £500 so slightly less than the cards and loan are costing me the cards are currently on 0% but this doesnt last forever and the only way of keeping them at 0% would be to apply for a new card with a 0% transfer.
As i'm already in £28000 debt its debatable weather i would qualify for a decent card with a 0% and i doubt i could get another loan as again they will look at my current debt and probably say no!

My original plan was as i said to sell my house clear the debt and downsize slightly this is still the preferable option but after being messed around for 4 months then the buyer pulling out for no reason i just dont know if i can handle going through all that again!

My debts have increased the last year because of two stupid decisions i made, i miss judged how much tax i was going to have to pay 2015-2016 so ended up with a large tax bill so i took a paypal loan to pay the bill and because of the way it was structured i've ended up paying that off in 508 days (if your not familiar with the way the paypal loan works they take a percentage in my case 20% of every transaction the goes through your paypal account until the loan is paid in my case i've ended up paying back £10000 in just over a year which has made me short in other areas resulting in me having to pay for stuff using my credit card but that debt as of last week is now clear so i will be aprox £140 a week better off)

I currently have business costs for a storeroom which i'm in the process of emptying and i intend to move my business totally into my house which would save me £267 per month (over half the monthly mortgage payment if i do remortgage)

As for the new project I've succesfully done up and and sold on 3 properties already at a decent profit which is how i have ended up mortgage free so i'm not a novice to it but i would now like to do ideally 2 properties plus a year with he aim to make at least £15k profit per property and if after a year the business model is working scale back on my current online business so the money from the remortgage is basically going to be reinvested to make me more income,

DCFC79 · 19 June 2017 at 3:49PM

Your score might go once the debts are paid off, how much it goes up by is anyones guess its just a number though.

Any idea how i can get round this?

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free