Complicated income mortgage advice required

moatmeister

Hi everyone, help required please! Loooking to buy a run down house and land for around 300k. Have assumed a 30% deposit will be required which is just possible but was hoping to get a deal with a 25% deposit. Looking to retain existing house on a let to buy if possible, whilst renovations continue, then rent out or sell (with £105k borrowed against £160k value). Cant easily raise further funds against that as current lender Gmac does not do further lending. Affordability no prob but will almost certainly need to be self certification. Went to a recommended broker yesterday who has arranged finance on the barn conversions next door. They came up with a deal from The Mortgage Works as the only self cert option available with a huge 2.5% set up charge which came to around £5k and rate about 6.4% fixed for 2 years or 6.7% with 1.5% charge again for 2 years. Biggest problem was the 35% deposit required. I will have another 100k cash available (not immeadiatly but within 1 year when building plot hopefully gets sold) Any other options for me please? Bridging loans etc???

yelf

self cert mortgages are not only hard to come by - but cost a fortune. Brdiging loans are expensive too

moatmeister

Yes i am aware of that but no time only 1 years management trading accounts for new business and not able to get audited accounts done in time. Have equity in current house and a collection of various reasonable value vintage cars and parts to sell but that wont happen overnight either. Wanted to get all this sorted first but this "lifestyle" property is ideal for us and has just unexpectedly come back on the market so I need a way to make it happen and I see self cert as the only option. Unless, of course, you know different.................!

Mrs_Bumble

Are there any credit history issues? I note that your current lender is GMAC?

moatmeister

No Mrs Bumble I dont beleive so. I monitor credit report regularly because it scares me and has held me back in the past. I have recent reports from all 3 agencies for us both. GMAC was due to self cert requirement on previous mortgage. I have had ccj issues in the distant past but have been 'clean' for the last 5 years apart from 1 missed payment in the last year due to bank error. Wife has had missed payments in the past caused by her previous partner (now financially dissassociated as of the end of this month) but has been 'clean' for the last 10 months with my help and assistance. We will be opening a joint account ready for potential joint application when dissaociation is confirmed. What are your thoughts please???

Mrs_Bumble

I think the deal you have been offered by the broker is probably as good as it going to get, two things to make the lenders twitchy, self cert and a renovation project so not that many in the market. So not bad all things considered.

Pee

I would think very, very carefully about bridging loans. I appreciate that you only hear about the times when it goes wrong, but I have seen people completely wiped out by bridging loans when things take longer to sell than expected.

moatmeister

Ok cheers.
I have limited cash available for deposit which is why 25% is better than 30%. Should i be looking to remortgage present house onto a new fixed lower rate and raise some more deposit? Also have a personal loan with approx 20k still owed which was used to start business. Should I keep my cash for larger deposit for new property or settle debts to increase affordability equation? what loks best to a lender?

moatmeister

Just to qualify the above, I have just enough cash now available to raise the deposit and pay the up front moving costs, with further funds available within 1 year. What looks best in the eyes of the lenders and gives me a greater chance of cutting a deal? Having a larger deposit but still some well serviced outstanding short term personal loan and credit card debt and less (but still adequate) affordability or no outstanding debt having paid it all off with some of the deposit money but a lower deposit but a bigger loan over a longer period and greater affordability? All help appreciated, i am begining to not see the wood for the trees!

Mrs_Bumble

How are you going to finance the renovations?

You seem to have a lot of committments before taking on this project?

Thrugelmir

Sell your existing house and live in a caravan or other temporary accomodation. This type of project envitably costs more than envisaged at the outset. So have as much liquid funds available as possible.