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  • FIRST POST
    • sammorey121
    • By sammorey121 14th Oct 16, 10:33 PM
    • 1Posts
    • 1Thanks
    sammorey121
    Mortgage Free but low income - looking to borrow via Mortgage
    • #1
    • 14th Oct 16, 10:33 PM
    Mortgage Free but low income - looking to borrow via Mortgage 14th Oct 16 at 10:33 PM
    Hi,

    I'm after some advice based upon my friends circumstances below - he is trying to borrow some money from the house he owns outright in London which is Mortgage free - however appears to be in a unique situation that falls between the gaps of traditional mortgage lending.

    - He owns a house in London that has been valued at £1,200,000.00. No mortgage & freehold in his name.
    - He started a business 3 years ago where he has a 50% share in the business.
    - Income in the past 12 months was £24,000 - through salary & dividend. The 12 months previous was £8000.
    - He gets rental income from lodgers but this cannot be counted against his income for lending.
    - Credit card debt of £7000
    - Personal loan of £5000

    He wants to borrow £50,000 as a mortgage against the house to consolidate debts & complete house improvements. He has approached mortgage brokers who don't seem to be able to lend and is now considering the less known banks in order to gain the lending.

    Any thoughts on this and whether high st banks would lend against this. It seems very odd as the LTV would be perfectly in his favour.

    Thanks in advance

    Regards

    Sam
Page 1
    • Thrugelmir
    • By Thrugelmir 14th Oct 16, 10:36 PM
    • 51,313 Posts
    • 43,142 Thanks
    Thrugelmir
    • #2
    • 14th Oct 16, 10:36 PM
    • #2
    • 14th Oct 16, 10:36 PM
    It seems very odd as the LTV would be perfectly in his favour.
    Originally posted by sammorey121
    Unfortunately debt consolidation is the issue. £12k of debt on his income is significant. Not only that but another £38k on top as well. Sets the alarms bells ringing.
    “A man is rich who lives upon what he has. A man is poor who lives upon what is coming. A prudent man lives within his income, and saves against ‘a rainy day’.”
    • minimike2
    • By minimike2 14th Oct 16, 11:59 PM
    • 1,721 Posts
    • 1,289 Thanks
    minimike2
    • #3
    • 14th Oct 16, 11:59 PM
    • #3
    • 14th Oct 16, 11:59 PM
    Maybe downsizing would be a better option.
    I am a mortgage industry professional. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice
    • Pixie5740
    • By Pixie5740 15th Oct 16, 8:07 AM
    • 8,873 Posts
    • 11,889 Thanks
    Pixie5740
    • #4
    • 15th Oct 16, 8:07 AM
    • #4
    • 15th Oct 16, 8:07 AM
    Mortgage brokers don't lend money they give advice and help source you a mortgage. So has he actually approached mortgage brokers to try and find him a mortgage or has he been going direct to lenders?
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
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