Own property, no mortgage, low income - how to fund move?

sooz

MildredTalbot wrote: »

Advice from two agents are that it needs to be cleared so that people view it as a refurb project and not as an existing home. Example - a large dining room that has a lot of large antique dressers around the walls - this effectively drops the apparent size of the room by about 6 feet in each dimension. Another: A large bedroom that with existing furnishing one can't see the obvious potential for splitting into two that is apparent from a architects drawing. And so on... There is a vast amount of stuff - some of which may return to fashion sometime in the next ten years - I've missed at least one cycle in the ebb and flow of auction house fashions since I got a lot of it. I'm prepared to risk some money by putting it into storage against that return - up until now I suppose I've been using the house as a storage facility and a home as a subsidiary.

12 feet of cabinets in one room?

I agree with the other poster. Go round the property & work out what you like & want to keep. Put all the rest into an auction, & stop worrying about what it was once worth, or might be worth. At the moment it's all just dragging you down.

Rockporkchop

Looks like the general consensus here from those that have understood the situation is:

1. Clear
2. Rent and Store
3. Auction/dispose of "stuff"
4. Sell property:D

BUT, I'd still like to know why the banks regard my proposal to take a mortgage out to buy another property (secured on the existing one) is seen as near criminal rather than just an extension of the usual way people buy and sell houses. It seems to penalise one for paying debts off! Perhaps that is the message - keep working, keep paying!

Too true. We paid off our first mortgage about ten years ago now. Having an unencumbered property did us no favours whatsoever and it became impossible to obtain credit for anything. I would never pay the mortgage off in full again (well some chance of that nowadays!), I would always keep a small mortgage going. No help to you but I do sympathise.

I am surprised at the agents' suggestion - would people really be unable to see a house as a renovation project just because it had loads of furniture in it? Seems strange. If you didn't want to part with any of the stuff yet, have you considered putting the bulk of it in storage so you can put the house on the market, just keeping the bits you need to use in the house? Big Yellow Storage is good, it will cost about £300 a month though but you could sell your house, move into the new one and could still give yourself a year or so to go through all your things.

My DH is a real hoarder and won't part with anything. At one point we had 17 chairs in our living room as he just wouldn't let go - we could barely move in there. This weekend he finally agreed to get rid of some things, he drove to the charity shop with them on Sat and I just found all the boxes ten minutes ago hidden in the bottom of the babies' wardrobe. Sigh.

teabelly

If you approach a commercial lender with your current home as a development with proper costings, cash flow projections etc then they may lend you enough to do it up. You'd ideally need a minimum of twice the projected length of the project in mortgage payments and a contingency, usually 20% of the overall. If you can demonstrate you have that then they will probably consider you a reasonable risk. Then you could sell it finished. You'd have to work out what it would be worth finished and compare to what you could get if you flogged it now. If it would split as flats find out if you can get enough to create one flat. Sell that flat and then split the rest of the house and move into either one of the flats or one elsewhere with the proceeds. But the flat market is a bit iffy so I would check with local agents as to whether the property is more desirable as a renovation project or a completed house or as some converted flats. There is also the idea of splitting vertically into houses as these are generally more desirable than flats.

Sell the stuff you don't need now as it adds to your savings and will make it easier to find finance. Also obtain credit via credit cards, use them and pay it off. This will start to build you a better credit rating.

MildredTalbot

sooz wrote: »

12 feet of cabinets in one room? .

Yes - three feet deep items on each side of a square room. You read it right.

EdInvestor

MildredTalbot wrote: »

This was one of my earlier attempts - to get the buy to let on the smaller property - with of course 100% guaranteed letting - because I would be living in it! They didn't go for that one at all!

I'm not surprised :D:rolleyes:

bdl1brick

You need to speak to a decent independant mortgage broker about financing your current place up to say 60% of its value.

MildredTalbot

Rockporkchop wrote: »

We paid off our first mortgage about ten years ago now. Having an unencumbered property did us no favours whatsoever and it became impossible to obtain credit for anything.

This needs shouted from the virtual rooftops on the fora where people are desperate to be rid of the last penny of debt and borrowing. In the end it works against you. The system needs debt to circulate and if you buck that flow you better be sure you are extremely well insulated against what fate might throw at you and changes in lifestyle with age because it's not easy to opt back in.

You have both my understanding and sympathy about the stuff. free horizontal surface area is measured in square inches here ... Once upon a time I knew where everything was amongst it all too - now I end up either having to replace or spend far to long searching.

MildredTalbot

bdl1brick wrote: »

You need to speak to a decent independant mortgage broker about financing your current place up to say 60% of its value.

Been there, done that. It fails because of the lack of income and credit history.

bdl1brick

MildredTalbot wrote: »

Been there, done that. It fails because of the lack of income and credit history.

You could try a bridging finance company for a long term bridge as they will mainly be interested in the value of the property but its likely to be more expensive than a standard mortgage.

There is also the risk that you could end up with two properties for a long time so they may want you to pay 12 months interest up front as part of the loan.

blued

How many people actually read the first post? I got from it that

OP wants to buy another house to live in
Sell the items in the current house at auction
Sell the other house when empty

Nothing about the OP wanting to renovate as so many replies mention
Nothing about wanting to sell the house at auction

Sorry had to get that off my chest!