Any lenders accept gifted money as income?

olias

Hi, strugglling to find a lender that will accept mine and wifes income streams to fund mortgage

My wife is disabled and I am am her full time carer. Our income is made up of government benefits (mine and hers), occupational pension (hers) and money that is gifted to my wife monthly by her parents.

Total joint income is around

Because I have to be available for my wifes needs, I cannot currently work. We currently own a house mortgage free with a value of approx £200000, and I am looking into raising cash through a remortgage to fund a renovation project (barn conversion) which will hopefully give me a work outlet of sorts and make some money, while still leaving me free at a moments notice to return home and assist my wife when needed.

I have currently been to Natwest, who at first agreed to lend based on our total income, then later their underwriters said that they would only lend on the income from pension and benefits, and disregard the gifted money. I have also been to London and country who approached Halifax, with the same result.

As the gifted money is paid monthly by bacs)), I really need to find a lender who will accept this gifted money as income to enable the level of borrowing I need.

Does anyone know a lender who will accept

Occupational pension
AND
Government benefits
AND
gifted money

when calculating income?

Thanks

Olias

Mrs_Bumble

Is the money a direct gift from the parents? Are you paying tax on the gifted money? If not I can't see any lender lending against it.

The government benefit is it reviewable or in place for life? How much is hers and then yours?
The occupational pension - how much is it
How much are you looking to raise?

herbiesjp

What mortgage amount are you looking for?

You may get something agreed, but you will need to approach a more flexible lender - or one that may apply higher income multiples based on the LTV - which hopefully will be lowish

L&C tend be ok for "standard" cases, but when it's a case of thinking outside of the box they tend to be a bit limited/blinkered

You may want to get a second opinion via another whole of market mortgage adviser

Also how long has the gifted money been paid to your wife?

olias

Hi, thanks for replying.

The cash is a direct gift, given each month transferred into our joint account by bacs. My wifes parents have paid this cash every month for about the last 5 years since not long after my wife became disabled, and is therefore shown on our bank statements monthly over that period

Wifes income is


My income


Basically I am looking at the maximum I could borrow, either by
One mortgage on my current property to fund purchase of barn and conversion costs
One mortgage on my current property to purchase barn, then a further self build mortgage secured on the barn to fund the conversion
One self build mortgage to purchase the barn and fund the conversion

Olias

olias

Sorry, forgot to add, mortgage would be in the region of £140000-£150000 (made up of either one or two mortgages as expained above) - Finished value of barn would be in the region of £250000 (EA's valuation)

Thanks

Olias

herbiesjp

How mcuh does the barn cost?

herbiesjp

Er - no

6 times income is not going to happen

You are going to have to speak to an adviser to see what maximum you could get, but I'm guessing it's nowhere near those figures - especially based on the income streams

Mrs_Bumble

Sorry its just not sustainable on that level of income, nowhere near, you would really be putting yourselves at risk.

olias

I am currently waiting to hear back from Buildstore, who are a specialist self build broker. They basically offer what they call an accelerator mortgage which as far as I can make out works as follows:

If you have a current mortgage (ie if I had raised a mortgage on my current home to purchase the barn at a figure of say £85000 - roughly £300 pm on an interest only mortgage), I then apply through them for a self build mortgage (for say, £65000) which is a staged mortgage secured on the barn. They allow you to stay in your current home and they 'disregard' your current mortgage, or rather just accept the £300 pm payments on it as an outgoing when looking at affordability, and lend against the barn on the basis of your income minus outgoings. Because this 'second' mortgage is staged, they always maintain a low LTV, and once the conversion is complete you then (in theory), either sell your first property and move into the barn (settling all mortgages) or sell the barn and settle the mortgages, taking the capital profit.

The mortgage(s) would only be paid for as long as the conversion and subsequent sale would take (max 3 yrs), so I can't see too much of a problem with sustainability (and worth a bit of belt tightning for a potential profit of up to £100K). If the project was done with two mortgages, one on each property, then I also can't see any risk for the lenders as there would be a very low LTV on each property




Olias

Mrs_Bumble

My understanding (and I haven't had an enquiry on this in a few months) is that the lenders in the self build field at the minute release funds in arrears so how will you fund the build between stages?

Is the barn detached or semi? do you have planning permission?

Self builds are always tricky as they do tend to overun cost wise!

My note above is cautionery because obviously you don't have a mortgage committment at the moment and so the outlay of 600 or so a month is going to be noticed at home.

olias

Mrs_Bumble wrote: »

My understanding (and I haven't had an enquiry on this in a few months) is that the lenders in the self build field at the minute release funds in arrears so how will you fund the build between stages?

Is the barn detached or semi? do you have planning permission?

Self builds are always tricky as they do tend to overun cost wise!

My note above is cautionery because obviously you don't have a mortgage committment at the moment and so the outlay of 600 or so a month is going to be noticed at home.

Hi and thanks, Buildstores 'accelerator mortgage' releases staged funds in advance so would not pose a problem re funding between stages

The barn has full planning permission and has had all neccessary surveys (structural/highways/bat! - etc etc)

Barn is technically semi as is an L shape with about 8' of the end belonging to the neighbour (who effectively uses it as a shed)

Re possible overspend, Worst case scenario is I would sell our current house, settle whatever mortgage is on it, and use the remaining equity to finish the conversion which we would then move into.

If we could find a lender, then for the potential profit, we are prepared to accept the extra outlay while the build is completed and can afford it.

Now you have a more complete picture, do you have any suggestions of possible lenders in case buildstore come back negative? Thanks.

Olias