mortgage advise

blackpoolowl

can anyone give me adviseon getting a mortgage.
i own a guest house with no mortgage value £225k ish. i am hoping to buy a house for when i come to selling the guest house. i can put down a deposit of about £50k on a house worth £150k. i have owned the guest house for 3 years & plowed all the profits into the buisiness so the books only show around £10k profit.
what is the best way of getting a mortgage , if this is possible on such a low income.
terry

MortgageMamma

HI terry

Impossible to say without knowing your full circumstances, sounds like you might be a classic self cert case

you need to run this buy an independent whole of market mortgage broker

blackpoolowl

do i have to pay more if i self cert? out of intrest what would the monthly cost be for a £100k mortgage? how much roughly a month

terry

Barney088

Have I understood you, you want to buy a house to move into when you sell your guest house, what would your income be then and would you plan to have a mortgage on it at that point (presumably the guest house sale would clear the mortgage) Am I right to assume that you will still run and live in the guest house for the immediate future?

The alternative I'd suggest you look into is to buy a house to rent out, a Buy to Let mortgage. Buy a house, rent it out and when you do sell the guest house, move into the property (having kicked the tennants out) and hey presto your sorted.

This is not a self cert case, your income is £10K as stated, although an accountant may be able to justify a little more income, lying about your income is illegal and potentially very dangerous for you.

Definitly get some professional advice.

Pal

Repayment on £100k mortgage is about £550 a month, give or take a bit.

blackpoolowl

sorry reading my details i was sketchy.
i want to buy a house now to do up to my likeing then move in, in a couple of years. i will be starting another buisness (driving instructor) when i sell the guest house & use the money from the sale to pay off my mortgage & hopefully buy a house in florida with the rest.(if my calculations work out!!!)

the £10k was net profit ....gross £25k, because i am on low income i do get a little from family credit which helps but i presume i would loose this if i bought another property?

thx in advance
terry

Fairdo_2

As Barney088 said, this seems to be the most likely route for you, if you are not planning to sell and buy simultaneously. (Probably a good idea if you are selling a Guest House, as this will probably take longer to get through the process!)

I also understand the point about self cert and falsifying income being illegal.

I agree that this would be illegal to falsely inflate earnings. However, where this may have been ideal for self cert is that the income is higher than declared, as much ploughed back into the business, dividends can also be taken in some circumstances, etc. Therefore, income from all sources can show differently to the Accounts. If this was not the case, there would not be a market at all for Self Cert.

Therefore, it should be carefully considered before anyone to go self cert, but it does work (legally) in some instances.

If this is to be bought with a move for future occupation this could be done on a Buy To Let basis and certain lenders do have a clause for "Future Occupation", meaning that you could take a standard residential mortgage. This works well for people with Tied Accomodation who wish to set themselves up with an abode once they finish the employment and lose their tied accomodation.

From the information given, it does look most likely that the Buy To Let route may be the most simple option.

Fairdo_2

Sorry but must have sent messages at the same time.

If you are looking to buy and do up, this may be once you've let it out for a while if you are looking this early on, but either way, just remember that you will have to pay for the money you are borrowing if/when the property is not let out. Obvious I know, but it has to be said.

Also make sure that there are no Early Repayment Charges at the time you plan to have sold the Guest House.